Final answer:
Natural monopolies can earn positive profit in the short run without government regulation.
Step-by-step explanation:
A natural monopoly arises when average costs are declining over the range of production that satisfies market demand. This typically happens when fixed costs are large relative to variable costs. As a result, one firm is able to supply the total quantity demanded in the market at lower cost than two or more firms—so splitting up the natural monopoly would raise the average cost of production and force customers to pay more.
With government regulation, a natural monopoly can be controlled in order to prevent it from taking advantage of its market power to earn excessive profits. By regulating price and/or output, the government can ensure that the natural monopoly operates in the best interest of consumers.
Therefore, the statement 'Without government regulation, natural monopolies can earn positive profit in the short run' is true.