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Suppose a government use marginal cost pricing rule to regulate a power plant, which is a natural monopoly. Which of the following is TRUE? The
Suppose a government use marginal cost pricing rule to regulate a power plant, which is a natural monopoly. Which of the following is TRUE?
The consumer surplus remains unchanged when compared to the case of an unregulated single-price monopoly.
The output level is efficient.
Both "The output level is efficient." and "The monopoly can only earn a normal profit." are correct.
The monopoly can only earn a normal profit.
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