Exhibit 15-5
-Consider the natural monopoly depicted in exhibit 15-5. If regulators set the price so the natural monopolist to at least break-even, how much output will the monopolist produce?

Question

Exhibit 15-5 
-Consider the natural monopoly depicted in exhibit 15-5. If regulators set the price so the natural monopolist to at least break-even, how much output will the monopolist produce?

Quizplus · Accepted Answer

To break even, the natural monopolist needs to produce where ATC intersects with the demand curve (P=ATC). In this case, it is at 6 units of output. Therefore, the monopolist will produce 6 units to break even.

Exhibit 15-5 -Consider the Natural Monopoly Depicted in Exhibit 15-5. If Regulators