Use the figure below to answer the following questions.
Figure 13.5.2
-Consider the natural monopoly depicted in Figure 13.5.2.If a regulatory agency sets a price just sufficient for the firm to make zero economic profit,what output will it produce?

Question

Use the figure below to answer the following questions.
  Figure 13.5.2
-Consider the natural monopoly depicted in Figure 13.5.2.If a regulatory agency sets a price just sufficient for the firm to make zero economic profit,what output will it produce?

Quizplus · Accepted Answer

At zero economic profit, the firm will produce at the output level where price (P) equals average total cost (ATC) at the bottom of the ATC curve. This occurs at point B12, where the output level is QS1U1.

Use the Figure Below to Answer the Following Questions