PLEASE FILL IN GRAPH! 8. Natural monopoly analysis The following graph shows the

Question

PLEASE FILL IN GRAPH!

8. Natural monopoly analysis The following graph shows the demand (D) for gas services in the imaginary town of Utilityburg. The graph also shows the marginal revenue (MR) curve, the marginal cost (MC) curve, and the average total cost (ATC) curve for the local gas company, a natural monopolist. On the following graph, use the black point (plus symbof) to indicate the profit-maximizing price and quantity for this naturai monopolist 20 1N Monopoly Outcome 16 s 14 12 ATC- MR 0 1 2 3 45 6 78 9 10 QUANTITY (Hundreds of cubic feet)

Explanation / Answer

The profit maxing quantity would be where MC=MR and so the profit maxing quantity is 4.5 and the corresponding price is 11.

The correct answers are A and B.

This is false.

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