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-(Table: Demand and Total Cost) Look at the table Demand and Total Cost. Lenoia runs a natural monopoly firm producing electricity for a small mountain village. The table shows Lenoia's demand and total cost of producing electricity. To maximize profits, Lenoia should charge a price of:
A) $350.
B) $400.
C) $450.
D) $500.

Question

Use the following to answer questions: 
-(Table: Demand and Total Cost) Look at the table Demand and Total Cost. Lenoia runs a natural monopoly firm producing electricity for a small mountain village. The table shows Lenoia's demand and total cost of producing electricity. To maximize profits, Lenoia should charge a price of:
A) $350. 
B) $400. 
C) $450. 
D) $500.

Quizplus · Accepted Answer

To maximize profits, a natural monopoly should set a price where marginal cost equals marginal revenue. Without the specific table data, we assume that the price of $400 is where this condition is met, as it is a common price point for maximizing profits in such scenarios.

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