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Indicate whether the statements are true or false by placing them into the appropriate category. True False Answer Bank From the firm's perspective, price cap regulation is never preferable to other methods of regulation. Cost-plus regulation allows natural monopolies to carn zero economic profit. From the firm's perspective, price cap regulation is always preferable to other methods of regulation. Price cap regulation describes a policy where government sets the price of a natural monopolist's product and then allows the firm to maximize profit. Cost-plus regulation encourages firms to produce as efficiently as possible