Natural monopoly to operate at price equal to marginal cost

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Why is it poor judgment for the government to regulate a natural monopoly to operate at Price equal to Marginal Cost?

It makes consumers very happy

The natural monopoly will operate at a loss and shut down

The natural monopoly will make a huge profit at the expense of consumer welfare

The natural monopoly will take advantage of this pricing strategy and control the entire market

Reference no: EM13770255

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