3. Diagram illustrates your local electricity company’s natural
a) If the government does not regulate this monopolist, what price will it charge? Briefly explain: $ __________
b) If the government imposes a price ceiling equal to the marginal cost $0.20, will the monopolist make profits or lose money? Briefly explain.
c) If the government imposes $0.10 price ceiling, how much kWh will the firm produce? Briefly explain:
d) If the government imposes a price ceiling of $0.30, will the monopolist make a profit, lose money, or break even? Briefly explain:
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