Earnings sharing regulation involves
A) setting the monopoly's price equal to its marginal cost.
B) assuming a natural monopoly will not charge a higher than the profit-maximising price.
C) requiring that the monopoly share its profits with its customers if the profits rise above a certain level.
D) setting a maximum price the monopoly may charge and maintaining it for many years.
E) setting the monopoly's price equal to its average total cost.

Question

Quizplus · Accepted Answer

Earnings sharing regulation requires that a monopoly share its profits with its customers if the profits exceed a certain level, ensuring that customers benefit from the monopoly's high profitability.

Earnings Sharing Regulation Involves