-The figure above provides information about Light-U-Up Utilities, which is a natural monopoly that provides electricity. If Light-U-Up is unregulated, it will produce ________ and sell at a price of ________.
A) 200 kwh; 10¢ per kwh
B) 200 kwh; 30¢ per kwh
C) 300 kwh; 20¢ per kwh
D) 400 kwh; 10¢ per kwh

Question

-The figure above provides information about Light-U-Up Utilities, which is a natural monopoly that provides electricity. If Light-U-Up is unregulated, it will produce ________ and sell at a price of ________.
A) 200 kwh; 10¢ per kwh 
B) 200 kwh; 30¢ per kwh 
C) 300 kwh; 20¢ per kwh 
D) 400 kwh; 10¢ per kwh

Quizplus · Accepted Answer

A natural monopoly maximizes profit where marginal cost equals marginal revenue. The unregulated monopoly will produce 200 kwh and sell at the price where the demand curve intersects this quantity, which is 30¢ per kwh.

-The Figure Above Provides Information About Light-U-Up Utilities, Which Is