Hand written solutions are strictly prohibited B. Natural monopoly analysisThe following graph shows the demand (D) for cable 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 cable company, a natural monopolist.On the following graph, use the black point (plus symbol) to indicate the profit-maximizing prife and quantity for this natural monopolist.?PRICE (Dollars per subscription)100R5040302010002MR468 10 12 14QUANTITY (Number of subscriptions)16ATCMC-18 20DMonopoly Outcome 3PRICE (Dollars per suf8402010002MR4 . . 10 12 14 16QUANTITY (Number of subscriptions)O TrueATCKICFalse18 20Which of the following statements are true about this natural monopoly? Check all that apply.DThe cable company is experiencing diseconomies of scale.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 cable company is experiencing economies of scale.True or False: Without government regulation, natural monopolles can earn positive profit in the long run.

The natural monopoly is a kind of monopoly that occurs due to a very high start-up or fixed cost. It…

B. Natural monopoly analysis The following graph shows the demand (D) for cable 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 cable company, a natural monopolist. On the following graph, use the black point (plus symbol) to indicate the profit-maximizing prije and quantity for this natural monopolist. PRICE (Dollars per subscription) 100 2 70 60 50 40 30 20 10 0 0 2 MR 460 10 12 14 QUANTITY (Number of subscriptions) 16 ATC MC 16 20 D Monopoly Outcome

B. Natural monopoly analysis The following graph shows the demand (D) for cable 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 cable company, a natural monopolist. On the following graph, use the black point (plus symbol) to indicate the profit-maximizing prije and quantity for this natural monopolist. PRICE (Dollars per subscription) 100 2 70 60 50 40 30 20 10 0 0 2 MR 460 10 12 14 QUANTITY (Number of subscriptions) 16 ATC MC 16 20 D Monopoly Outcome

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Hand written solutions are strictly prohibited

B. Natural monopoly analysis
The following graph shows the demand (D) for cable 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 cable company, a natural monopolist.
On the following graph, use the black point (plus symbol) to indicate the profit-maximizing prife and quantity for this natural monopolist.
?
PRICE (Dollars per subscription)
100
R
50
40
30
20
10
0
0
2
MR
468 10 12 14
QUANTITY (Number of subscriptions)
16
ATC
MC-
18 20
D
Monopoly Outcome

3
PRICE (Dollars per suf
8
40
20
10
0
0
2
MR
4 . . 10 12 14 16
QUANTITY (Number of subscriptions)
O True
ATC
KIC
False
18 20
Which of the following statements are true about this natural monopoly? Check all that apply.
D
The cable company is experiencing diseconomies of scale.
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 cable company is experiencing economies of scale.
True or False: Without government regulation, natural monopolles can earn positive profit in the long run.

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