The figure provides information about Light – U- Up Utilities, which is a natural monopoly that provides electricity. If Light-U-Up is regulated, what is its economic profit if it must follow a marginal cost pricing nule? 55 s0 OA -$20 45 40 35 O B. -$40 OC. $30 30 D. $0 25 20 15 LRAC 10 MC 100 200 300 400 500 MR Quontily (kilowat houra at a marginal cost pricing nule is imposed on the natural monopoly in the figure, nhen total surplus will be OA. $0. OB. S8 million. OC. $4 million. O D. $16 milion. LRAC MC MR D. 4 Quantity (miliona of unit) fuad so eo Pice and costs (dollors per uni
The figure provides information about Light – U- Up Utilities, which is a natural monopoly that provides electricity. If Light-U-Up is regulated, what is its economic profit if it must follow a marginal cost pricing nule? 55 s0 OA -$20 45 40 35 O B. -$40 OC. $30 30 D. $0 25 20 15 LRAC 10 MC 100 200 300 400 500 MR Quontily (kilowat houra at a marginal cost pricing nule is imposed on the natural monopoly in the figure, nhen total surplus will be OA. $0. OB. S8 million. OC. $4 million. O D. $16 milion. LRAC MC MR D. 4 Quantity (miliona of unit) fuad so eo Pice and costs (dollors per uni
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:If an average cost pricing rule is imposed on the natural monopoly in the figure,
then the deadweight loss will be
OA $16 million.
O B. SO.
O C. $9 million.
O D. $1 million.
LRAC
MC
MR
D.
2
3.
Quantily (millions of unih)
4.
4328
C
Price and costs (dollars per unit

Transcribed Image Text:plz hell answer all 3
The figure provides information about Light – U – Up Utlities, which is a natural
monopoly that provides electricity. If Light-U-Up is regulated, what is its
economic profit if it must follow a marginal cost pricing nule?
I so
O A. - $20
O B. -$40
40
35
OC. $30
30
O D. S0
25
20
15
LRAC
10
MC
100 200 300 400 500
MR Quantity (kilowott hours)
If a marginal cost pricing rule is imposed on the naturai monopoly in the figure,
then total surplus will be
O A. $0.
O B. $8 million
O C. $4 million.
OD. $16 milion.
LRAC
MC
MR
3
4
5.
Quantily (millions of unit)
dev
(aun sed soyop) sisoo puo eoa
(ymg ed sueo) e
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