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Wisconsin Electricity Corporation is a natural monopoly. The graph shows the market demand curve and the firm's marginal cost curve. The monopoly is unregulated and maximizes profit. Draw the firm's marginal revenue curve. Label it MR. Draw a point at the profit-maximizing price and quantity. Label it 1. The monopoly makes a positive economic profit. Draw the firm's average total cost curve. Label it ATC. Draw a point on the ATC curve at the quantity produced. Label it 2. Draw shapes that show 1) the monopoly's economic profit. Label it EP. 2) the consumer surplus. Label it CS. 3) the deadweight loss. Label it DWL. Price and cost (cents per kWh) 90- 80- 70- 60- 50- 40- 30- 20 10- MC D 0- 0 4 8 12 16 20 24 28 32 36 40 Quantity (millions of kWh per month) >>> Draw only the objects specified in the question.

Wisconsin Electricity Corporation is a natural monopoly. The graph shows the market demand curve and the firm's marginal cost curve. The monopoly is unregulated and maximizes profit. Draw the firm's marginal revenue curve. Label it MR. Draw a point at the profit-maximizing price and quantity. Label it 1. The monopoly makes a positive economic profit. Draw the firm's average total cost curve. Label it ATC. Draw a point on the ATC curve at the quantity produced. Label it 2. Draw shapes that show 1) the monopoly's economic profit. Label it EP. 2) the consumer surplus. Label it CS. 3) the deadweight loss. Label it DWL. Price and cost (cents per kWh) 90- 80- 70- 60- 50- 40- 30- 20 10- MC D 0- 0 4 8 12 16 20 24 28 32 36 40 Quantity (millions of kWh per month) >>> Draw only the objects specified in the question.

Economics:
Economics:
10th Edition
ISBN:9781285859460
Author:BOYES, William
Publisher:BOYES, William
Chapter23: Profit Maximization
Section: Chapter Questions
Problem 13E
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Wisconsin Electricity Corporation is a natural monopoly. The graph shows the market demand curve and the firm's marginal cost curve. The monopoly is unregulated and maximizes profit. Draw the firm's marginal revenue curve. Label it MR. Draw a point at the profit-maximizing price and quantity. Label it 1. The monopoly makes a positive economic profit. Draw the firm's average total cost curve. Label it ATC. Draw a point on the ATC curve at the quantity produced. Label it 2. Draw shapes that show 1) the monopoly's economic profit. Label it EP. 2) the consumer surplus. Label it CS. 3) the deadweight loss. Label it DWL. Price and cost (cents per kWh) 90- 80- 70- 60- 50- 40- 30- 20 10- MC D 0- 0 4 8 12 16 20 24 28 32 36 40 Quantity (millions of kWh per month) >>> Draw only the objects specified in the question.
Transcribed Image Text:Wisconsin Electricity Corporation is a natural monopoly. The graph shows the market demand curve and the firm's marginal cost curve. The monopoly is unregulated and maximizes profit. Draw the firm's marginal revenue curve. Label it MR. Draw a point at the profit-maximizing price and quantity. Label it 1. The monopoly makes a positive economic profit. Draw the firm's average total cost curve. Label it ATC. Draw a point on the ATC curve at the quantity produced. Label it 2. Draw shapes that show 1) the monopoly's economic profit. Label it EP. 2) the consumer surplus. Label it CS. 3) the deadweight loss. Label it DWL. Price and cost (cents per kWh) 90- 80- 70- 60- 50- 40- 30- 20 10- MC D 0- 0 4 8 12 16 20 24 28 32 36 40 Quantity (millions of kWh per month) >>> Draw only the objects specified in the question.
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