In practice, regulatory boards try to set the price of a natural monopoly so that price:
A) equals marginal cost.
B) covers all explicit costs.
C) includes all costs plus a normal return on capital investment.
D) is constant over time.

Question

Quizplus · Accepted Answer

Regulatory boards aim to set prices for natural monopolies to cover all costs and provide a normal return on capital investment, ensuring the monopoly can sustain operations and invest in infrastructure.

In Practice, Regulatory Boards Try to Set the Price of a Natural