Average cost pricing in a natural monopoly will BE INEFFICIENT AND WILL PRODUCE ZERO ECONOMIC PROFIT. Average costing pricing rule refers to the pricing technique which regulators imposed on certain companies in order to limit the price that the companies can charge consumers for their products or services. In average cost pricing, the companies are forced to set the unit price of their product very close to the average cost needed to produce it. This pricing method is often imposed on natural monopoly industries.
