Figure 9.13 Figure 9.13 shows the market demand and cost curves facing a natural monopoly.
-Refer to Figure 9.13.If the regulators of the natural monopoly allow the owners of the firm to break even on their investment, the firm will produce an output of ________ and charge a price of ________.

Question

Figure 9.13  Figure 9.13 shows the market demand and cost curves facing a natural monopoly.
-Refer to Figure 9.13.If the regulators of the natural monopoly allow the owners of the firm to break even on their investment, the firm will produce an output of ________ and charge a price of ________.

Quizplus · Accepted Answer

When regulators allow a natural monopoly to break even, the firm produces where average total cost (ATC) equals demand, which is at Q3 units and charges a price of P3.

Figure 913 Figure 9