Natural monopolies to charge a price equal to marginal cost

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Government cannot require natural monopolies to charge a price equal to marginal cost because…

a. natural monopolies will withhold their products if subject to regulation.

b. natural monopolies have zero marginal cost, so they would have to give the product away.

c. marginal cost is always below average total cost for a natural monopoly.

d. marginal cost is always above average total cost for a natural monopoly.

Reference no: EM131388803

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