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From course:

Economics A Level (DONEEEEEEE)

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Question:

How could Governments try to stop Natural Monopolies from achieving High Supernormal Profits?

Author: eric_galvao



Answer:

-Profit Maxing will restrict Output to MC =MR creating a Supernormal Profit for themselves -Government may intervene ie give out Subsidies so Output is Increased to where AD = MC and thus Prices drop dramatically.


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