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Fill in the blanks to make the following statements correct. a. The term natural monopoly refers to an industry in

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Fill in the blanks to make the following statements correct.
a. The term natural monopoly refers to an industry in which only a single firm can operate at its
b. A regulated natural monopoly that is forced to set its price equal to marginal cost will earn ______ if its long-run average costs are falling.
c. A regulated natural monopoly that is subject to average-cost pricing and operating on the downward-sloping portion of its LRAC curve will earn ______ profits. Since price ______ marginal cost, this outcome will not be allocatively efficient.
d. Marginal-cost pricing for a natural monopoly is an efficient pricing system, but it leads to ______ for the firm if average costs are falling.

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Microeconomics

Microeconomics

ISBN: 978-0321866349

14th canadian Edition

Authors: Christopher T.S. Ragan, Richard G Lipsey

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Question Posted: December 22, 2015 02:49:01
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