Price and costs (dollars per unit) o a∞ 6543 0000 21 2 0 1 2 MR LRAC MC D 3 5 6 Quantity (millions of units) We know that the firm shown in the figure above is a natural monopoly because as output increases, the demand curve slopes downward. average total cost decreases so that the firm can supply the market at lower cost than two firms. marginal cost is constant. marginal revenue curve lies below its demand curve.
Price and costs (dollars per unit) o a∞ 6543 0000 21 2 0 1 2 MR LRAC MC D 3 5 6 Quantity (millions of units) We know that the firm shown in the figure above is a natural monopoly because as output increases, the demand curve slopes downward. average total cost decreases so that the firm can supply the market at lower cost than two firms. marginal cost is constant. marginal revenue curve lies below its demand curve.
Chapter23: Profit Maximization
Section: Chapter Questions
Problem 13E
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Question
![Price and costs (dollars per unit)
دنیا
0000
3
2
1
0
2
MR
LRAC
MC
D
3
5
6
Quantity (millions of units)
We know that the firm shown in the figure above is a natural monopoly because as output increases, the
demand curve slopes downward.
average total cost decreases so that the firm can supply the market at lower cost than two firms.
marginal cost is constant.
marginal revenue curve lies below its demand curve.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F32204771-395c-4529-ac0d-5a806706a760%2F3f531988-7ce9-42c1-9888-f68ca0960b97%2Fx0cbjf_processed.png&w=3840&q=75)
Transcribed Image Text:Price and costs (dollars per unit)
دنیا
0000
3
2
1
0
2
MR
LRAC
MC
D
3
5
6
Quantity (millions of units)
We know that the firm shown in the figure above is a natural monopoly because as output increases, the
demand curve slopes downward.
average total cost decreases so that the firm can supply the market at lower cost than two firms.
marginal cost is constant.
marginal revenue curve lies below its demand curve.
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