If average- cost pricing is imposed on a falling- cost natural monopoly,the result will be
A)losses and exit from the industry in the long run.
B)economic losses.
C)exit from the industry in the short run.
D)zero economic profit.
E)economic profits.

Question

Quizplus · Accepted Answer

Average-cost pricing allows the natural monopoly to cover its costs, including a normal profit, resulting in zero economic profit.

If Average- Cost Pricing Is Imposed on a Falling- Cost