Puerto Rico Electric Power Authority (PREPA) is a natural monopoly that is unregulated. PREPA maximizes its profit. If PREPA decides to give households a 50 percent discount for second and third connections, how will its economic profit, consumer surplus, and deadweight loss change? A. Its profit will increase, but consumer surplus might increase or decrease. B. It will produce a bigger quantity, but as most sales are at the discount price consumer surplus will increase. C. It will produce a bigger quantity, which will increase consumer surplus and decrease deadweight loss. D. Its profit will increase and both consumer surplus and deadweight loss will decrease.
Give correct typing answer with explanation and conclusion
he Puerto Rico Electric Power Authority (PREPA) is a natural
A. Its profit will increase, but
B. It will produce a bigger quantity, but as most sales are at the discount
C. It will produce a bigger quantity, which will increase consumer surplus and decrease deadweight loss.
D. Its profit will increase and both consumer surplus and deadweight loss will decrease.
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