If the regulatory agency sets a price where AR=AC for a natural monopoly, output will be greater than the monopoly profit maximizing level and less than the competitive level.
A company with a monopoly is one where its product is sold exclusively and there are no close substitutes. Unrestrained monopolies have the ability to set prices and exercise market power. Examples include Microsoft and Windows, DeBeers and diamonds, and your neighborhood gas provider.
A monopoly is described as a single producer or seller who forbids rivals from offering the same product. A monopoly has the power to set prices and makes it difficult for rivals to enter the market.
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