D2L 9.1 How Monopolies Form: Ba×Tutor - Solution Page 1 of 1 | H XLesson 9.1 How Monopolies FEC-321-001 Test #3 JSU (Dr. Bb Answered: esc Question 10 of← → COlearn.hawkeslearning.com/Portal/Lesson/lesson_certify#!Question 10 of 11, Step 1 of 17/11Correct+0A natural monopoly occurs when the quantity demanded is less than the minimum quantity at the bottom of the long-run average cost curve. The bottom of long-runaverage cost curve corresponds to the outputs with lowest average cost. To identify the average cost of each output quantity, divide total cost by the appropriate quantity.Total cost ($) Average cost ($)Quantity (units)1,000$5,500$5.501,250$6,250$5.001,500$6,750$4.501,750$7,875$4.502,000$12,000$6.002,250$15,750$7.00According to the obtained values, the bottom of long-run average cost curve corresponds to an average cost of $4.50, which appears at the minimum output of 1,500units.Equilibrium is the only price where quantity demanded is equal to quantity supplied. Consequently, the maximum demand at which the market will be at the equilibriumand the firm will stay a natural monopoly is 1,250 units.Correct Answer: 1,250 unitsReturn to Certify2024 Hawkes Learningㄖㄨ

Elaboration on the SolutionCalculating Average CostTo calculate the average cost for each output…

Answered: D2L 9.1 How Monopolies Form: Ba × Tutor…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter13: Monopoly And Antitrust

Section: Chapter Questions

Problem 4P

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