A natural monopoly is efficient if its price equals marginal cost, but a second- best outcome is

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A natural monopoly is efficient if its price equals marginal cost, but a second-

best outcome is for price to equal average total cost.

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Essential Foundations Of Economics

ISBN: 9780520219465

7th Global Edition

Authors: Bade, Robin;Parkin, Michael

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Question Posted: Nov 05, 2024 10:01 AM

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A natural monopoly is efficient if its price equals marginal cost, but a second- best outcome is for price to equal average total cost.
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Regulation might achieve an efficient use of resources or help the monopoly to maximize economic profit.
A price cap supported by earnings sharing regulation is the most effective practical method of regulating a natural monopoly.
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A natural monopoly is efficient if its price equals marginal cost, but a second- best outcome is

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Essential Foundations Of Economics

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