Use the figure below to answer the following questions.
Figure 13.3.4
-Consider the natural monopoly depicted in Figure 13.3.4.Total surplus is at a maximum when quantity is

Question

Use the figure below to answer the following questions.
  Figure 13.3.4
-Consider the natural monopoly depicted in Figure 13.3.4.Total surplus is at a maximum when quantity is

Quizplus · Accepted Answer

Total surplus is maximized when the quantity is at the socially optimal level, which occurs where the price equals marginal cost. In a natural monopoly, this is typically at a higher quantity and lower price, such as Q3 and P0.

Use the Figure Below to Answer the Following Questions