Question: it is unrealistic to regulate a natural monopoly at marginal...
It is unrealistic to regulate a natural monopoly at marginal cost pricing because
|marginal cost pricing ends up having the natural monopoly firm earn zero economic profits.|
|the government is not allowed to regulate markets.|
|firms do not need to follow regulations from the government.|
|regulating a market causes more deadweight loss.|
|with this type of regulation, the firm will want to shut down, and that outcome is not desirable for society.|