If the government wants to regulate a natural monopoly it will force the firm to set price equal toGroup of answer choicesaverage cost.marginal cost.marginal revenue.None of the above.

If the government attempts to force a natural monopoly to charge a price equal to marginal cost

In a natural monopoly,Group of answer choicesif the government requires marginal cost pricing, it will likely have to subsidize the firm.the marginal revenue curve is horizontal.the marginal cost curve is positively sloped.society would be better off if antitrust laws were used to create many different firms in the market.

One problem with government operation of monopolies is thatGroup of answer choicesa benevolent government is likely to be interested in generating profits for political gain.monopolies typically have rising average costs.a government-regulated outcome will increase the profitability of the monopoly.the government typically has little incentive to reduce costs.

A natural monopoly occurs whenGroup of answer choicesthe product is sold in its natural state, such as water or diamonds.there are economies of scale over the relevant range of output.the firm is characterized by a rising marginal cost curve.production requires the use of free natural resources, such as water or air.

Government-granted monopolies are likely to have prices determined byMultiple Choicegovernment regulation.law of supply.law of demand.interaction of supply and demand.