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    Regulating a Natural Monopoly

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    Problem 10. I am unable to figure this problem out and need your assistance in understanding this problem.

    Thank you

    Sonia Allen.

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    Solution Summary

    The problem illustrates with the help of a typical cost curve what a natural monopoly looks like. It also explores the different ways in which it can be regulated: marginal cost pricing, average cost pricing etc. It also explores the pros and cons of each method of regulating a natural monopoly.