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Posted: February 16th, 2023
Suppose a profit-making unregulated natural monopoly
Suppose a profit-making unregulated natural monopoly is brought under the control of regulator who requires it in future to follow a marginal cost pricing rule. Which of the following statements isfalse?a)The monopoly would move from making a profit to making a loss.b)The monopoly would reduce its output.c)The monopoly would now set its output where its MC curve intersects its AR curve.d) The monopolist's price would now equal its marginal cost.
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