If the government decides to regulate this natural monopoly by forcing them to sell the quantity and price where the market demand curve crosses average cost, then the market price would be?

Respuesta :

The government can regulate monopolies through: Price capping – limiting price increases. Regulation of mergers. Breaking up monopolies.

What happens when you regulate a natural monopoly?

  • Regulatory Options for Addressing Natural Monopoly A herbal monopoly will produce at the extent in which marginal revenue (MR) equals marginal fees (MC),
  • and could then use the marketplace call for curve to decide the best rate to rate for this degree of production.

What is a herbal monopoly ?

  • A herbal monopoly is a unmarried dealer in a marketplace in which common fees are lowering throughout the whole output variety as a end result of economies of scale.
  • They regularly have very excessive constant fees and really low variable fees, just like the town water supply, and are specially crucial industries.

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