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Which of the following statements is w .-.. It is not possible to force a natural [franchise] monopolist to set P = MC. This is
Which of the following statements is w .-.. It is not possible to force a natural [franchise] monopolist to set P = MC. This is because for such monopolists MC is declining implying that AC s MC for any feasible size of the market. Setting P = MC would result in losses for the monopolist since for that output leyelAC s P. It is not possible to force a natural {franchise} monopolist to set P = MC. This is because for such monopolists MC is always equal to AC and setting P = AC = MC implies that the firm will exactly break- even which is not an option since the firm must be guaranteed to earn monopoly prot in order to operate. It is entirely feasible to force a natural {franchise} monopolist to set P = MC. This is because for such monopolists AC is always constant and therefore always equal to MC. Setting P = AC = MC generates the same outcome as the long run equilibrium of perfectly competitiye markets. which is the desirable outcome from society's point of view. It is not possible to force a natural {franchise} monopolist to set F' = MC. This is because for such monopolists AC is declining implying that MC
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