Attempts8. Natural monopoly analysisKeep the Highest / 3The following graph gives the demand (D) curve for satellite TV services in the fictional town of Streamship Springs. The graph also shows themarginal revenue (MR) curve, the marginal cost (MC) curve, and the average total cost (ATC) curve for the local satellite TV company, a naturalmonopolist.On the following graph, use the black point (plus symbol) to indicate the profit-maximizing price and quantity for this natural monopolist.PRICE (Dollars per subscription)100908070605040302010ATCMCMR00246 810 1214161820QUANTITY (Number of subscriptions)D+Monopoly Outcome(?)Which of the following statements are true about this natural monopoly? Check all that apply.The satellite TV company must own a scarce resource.In order for a monopoly to exist in this case, the government must have intervened and created it.The satellite TV company is experiencing economies of scale.It is more efficient on the cost side for one producer to exist in this market rather than a large number of producers.True or False: Without government regulation, natural monopolies can earn positive profit in the short run.TrueFalse

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Answered: Attempts 8. Natural monopoly analysis…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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An unregulated natural monopoly bottles Mt. McKinley air, unique clean air that has no substitutes. The monopoly's total fixed cost is $30,000 a year and its marginal cost is 10 cents a can. The graph illustrates the demand for Mt. McKinley air. Draw the average total cost curve. Plot the four control points at the quantities 100,000, 200,000, 300,000, and 400,000. Label the curve. Draw a point at the new quantity and price if the regulator sets a price cap such that the monopoly breaks even. The number of cans produced sold its marginal cost. A. is; benefit; exceeds B. is not; benefit; exceeds OC. is not; revenue; is greater than D. is; revenue; equals the efficient quantity because the marginal from the last can 60- 50- 40- 30- 20 20 10- Price (cents per can) 0- ATC MC D $300 100 200 300 400 Quantity (thousands of cans per year) >>> Draw only the objects specified in the question. 500
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3. Natural monopoly analysis The following graph gives the demand (D) curve for satellite TV services in the fictional town of Streamship Springs. The graph also shows the marginal revenue (MR) curve, the marginal cost (MC) curve, and the average total cost (ATC) curve for the local satellite TV company, a natural monopolist. On the following graph, use the black point (plus symbol) to indicate the profit-maximizing price and quantity for this natural monopolist. PRICE (Dollars per subscription) 100 90 80 70 60 50 40 30 20 10 0 0 2 4 MR True 10 12 14 QUANTITY (Number of subscriptions) 16 False ATC MC 18 20 D Which of the following statements are true about this natural monopoly? Check all that apply. Monopoly Outcome In order for a monopoly to exist in this case, the government must have intervened and created it. It is more efficient on the cost side for one producer to exist in this market rather than a large number of producers. The satellite TV company must own a scarce resource.…
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8. Natural monopoly analysis The following graph shows the demand (D) for gas services in the imaginary town of Utilityburg. The graph also shows the marginal-revenue (MR) curve, the marginal-cost (MC) curve, and the average-total-cost (ATC) curve for the local gas company, a natural monopolist. On the following graph, use the black point (plus symbol) to indicate the profit-maximizing price and quantity for this natural monopolist. PRICE (Dollars per hundred cubic metres) 2 20 18 16 14 12 10 8 MR ATC MC 0 0 1 2 3 4 5 6 7 8 9 10 QUANTITY (Hundreds of cubic metres) D + Monopoly Outcome (? Which of the following statements are true about this natural monopoly? Check all that apply. It is more efficient on the cost side for one producer to exist in this market rather than a large number of producers. The gas company is experiencing economies of scale. The gas company is experiencing diseconomies of scale. The gas company must own a scarce resource. True or False: Without government…

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