One government policy for dealing with natural monopoly is to:

A) impose a price floor to eliminate the deadweight loss.
B) impose a price ceiling to reduce economic profit.
C) break it up into smaller firms.
D) impose fines on the monopolist.

Natural Monopoly

A market condition where due to high infrastructure costs or significant barriers to entry, a single company can supply a product or service more efficiently than any potential competitor.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, reflecting the true financial gain of a business.