Exhibit 15-4

-The firm in Exhibit 15-4 is a natural monopoly.If left unregulated,the consumers experience a consumer surplus of:

Question

Exhibit 15-4
 
-The firm in Exhibit 15-4 is a natural monopoly.If left unregulated,the consumers experience a consumer surplus of:

Quizplus · Accepted Answer

In a natural monopoly, if left unregulated, the firm maximizes profit where marginal cost equals marginal revenue. The consumer surplus is the area above the price level and below the demand curve up to the quantity produced. Based on the given options, $420 is the correct consumer surplus value.

Exhibit 15-4 -The Firm in Exhibit 15-4 Is a Natural Monopoly.If Left