Question | The accompanying graph represents a hypothetica natural monopoly. a. Place po” aria-describedby=”a0g”>
Assignment Score: 486/1000 < Question 8 of 10 > The accompanying graph represents a hypothetica natural monopoly. a. Place point A at the price and quantity where the firm will maximize profits. b. Place point B at the point of cost-plus regulation when the firm makes no profit. Price c. What price would the monopolist set without any market intervention? Round to the nearest dollar. Enter numeric value d. At this price, how much profit would the monopolist make? Round to the nearest dollar. Price The graph shows the relevant curves for a natural monopoly. The two AC curves show average cost before and after the discovery of a new process that reduces costs. Suppose that the firm is regulated using the cost-plus, or fair-return price, method and that regulators can accurately estimate the firm's costs of production. S6,2 3.5 When the firm's average cost function is represented by the curve AC 1, what is the firm's economic profit? AC2 economic profit: $ After the firm discovers the above mentioned cost savings and is now represented by AC 2, what is the firm's economic profit? ?? |
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Subject | economy |