The graph to the right shows the demand and cost curves for a natural monopoly. 1.) Using the point tool, identify the firm's price and quantity if the monopolist is required to set a marginal cost price. Label the point 'MC'. 2.) Using the rectangle drawing tool, identify the firm's profit or loss at that price. Properly label the object. Carefully follow the instructions above, and only draw the required objects. A regulated monopolist that was required to set this price would O A. make a positive profit. OB. make a profit of zero. OC. exit the industry. O D. None of the above. Price ($ per unit) 10- MR D Output (thousands of units) LAC -LMC 10
The graph to the right shows the demand and cost curves for a natural monopoly. 1.) Using the point tool, identify the firm's price and quantity if the monopolist is required to set a marginal cost price. Label the point 'MC'. 2.) Using the rectangle drawing tool, identify the firm's profit or loss at that price. Properly label the object. Carefully follow the instructions above, and only draw the required objects. A regulated monopolist that was required to set this price would O A. make a positive profit. OB. make a profit of zero. OC. exit the industry. O D. None of the above. Price ($ per unit) 10- MR D Output (thousands of units) LAC -LMC 10
Microeconomics: Principles & Policy
14th Edition
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:William J. Baumol, Alan S. Blinder, John L. Solow
Chapter13: Between Competition And Monopoly
Section: Chapter Questions
Problem 9DQ
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Transcribed Image Text:The graph to the right shows the demand and cost curves for a natural monopoly.
1.) Using the point tool, identify the firm's price and quantity if the monopolist is required to set a
marginal cost price. Label the point "MC'.
2.) Using the rectangle drawing tool, identify the firm's profit or loss at that price. Properly label
the object.
Carefully follow the instructions above, and only draw the required objects.
A regulated monopolist that was required to set this price would
O A. make a positive profit.
O B. make a profit of zero.
OC. exit the industry.
O D. None of the above.
Price ($ per unit)
10-
9-
8-
1-
MR
D
Output (thousands of units)
LAC
-LMC
10
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