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Question

A certain town in the Midwest obtains all of its electricity from

one company, Northstar Electric. Although the company is a monopoly, it is owned by the citizens of the town, all of whom split the profits equally at the end of each year. The CEO of the company claims that because all of the profits will be given back to the citizens, it makes economic sense to charge a monopoly price for electricity. True or false? Explain your opinion for your argument.

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Subject: Business, Economics

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