Figure 8.12
-Figure 8.12 shows a demand and costs of an unregulated monopoly. This firm must

Question

Quizplus · Accepted Answer

The demand and cost curves in the graph suggest that the firm is a natural monopoly, meaning that it can produce the entire market demand at a lower cost than any potential competitor. This is indicated by the downward sloping average cost curve that intersects with the demand curve at a quantity where the firm is earning positive economic profits. The other choices are not consistent with the information in the graph.

Figure 8.12 -Figure 8.12 Shows a Demand and Costs of an Unregulated