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

Question

Quizplus · Accepted Answer

Earnings-sharing regulation involves requiring that the monopoly share its profits with its customers if the profits rise above a certain level. This approach aims to prevent monopolies from earning excessive profits at the expense of consumers.

Earning-Sharing Regulation Involves