Which of the following is one method by which the government can regulate the price charged by a natural monopoly?
A)Making marginal cost equal to marginal revenue pricing
B)Setting prices for a period and then allowing the firm to keep any profits made over that period
C)Average variable cost pricing
D)Threatening to shut down the firm
E)Fixed cost pricing

Question

Quizplus · Accepted Answer

The government can regulate a natural monopoly by setting prices for a period and allowing the firm to keep any profits made, which incentivizes efficiency while controlling prices.

Which of the Following Is One Method by Which the Government