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supersour supersour
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A year ago
Consider the case of a natural monopoly with falling long-run average costs. If regulation sets the price equal to marginal cost, then

▸ the demand curve would shift to the left.

▸ the firm would operate at a loss and eventually go out of business.

▸ the outcome would be allocatively inefficient.

▸ shortages would result.

▸ the firm would earn economic profits.
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Microeconomics

Microeconomics


Edition: 17th
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varelaj326varelaj326
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A year ago
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supersour Author
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A year ago
Smart ... Thanks!
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Good timing, thanks!
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