please answer letter D only and provide clear and neat solution thank you E. Referring to the graph below of a natural monopoly:10090807060555040302010PriceмсMRD5 10 15 20 25 30 35 40 QuantityAssume that MC = ATCa. What price and quantity would be expected if the firm is allowed to operate completelyunregulated and why? What is the firm's total economic profit?b. What is the deadweight loss of the firm? What is the source of the deadweight loss of amonopolistic firm?c. If a price ceiling of $40 is imposed by government regulators on the monopolist, estimatethe quantity that the monopolist will produce based on the graph. Would the price ceilingon the monopolist improve economic efficiency or not? Explain briefly.d. If this market is a regular monopoly instead of a natural monopoly, what change (s) wouldlikely be made on the graph to depict a regular monopoly?

A monopoly refers to a market in which there is only one single seller that sell a product that has…

Answered: E. Referring to the graph below of a…

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E. Referring to the graph below of a natural monopoly: 100 90 80 70- 60 55- Price 50 40 30+ 20 10 MR D MC

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter9: Monopoly

Section: Chapter Questions

Problem 29CTQ: Imagine that you ale managing a small firm and thinking about entering the market of a monopolist....

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Question

please answer letter D only and provide clear and neat solution thank you

E. Referring to the graph below of a natural monopoly:
100
90
80
70
60
55
50
40
30
20
10
Price
мс
MR
D
5 10 15 20 25 30 35 40 Quantity
Assume that MC = ATC
a. What price and quantity would be expected if the firm is allowed to operate completely
unregulated and why? What is the firm's total economic profit?
b. What is the deadweight loss of the firm? What is the source of the deadweight loss of a
monopolistic firm?
c. If a price ceiling of $40 is imposed by government regulators on the monopolist, estimate
the quantity that the monopolist will produce based on the graph. Would the price ceiling
on the monopolist improve economic efficiency or not? Explain briefly.
d. If this market is a regular monopoly instead of a natural monopoly, what change (s) would
likely be made on the graph to depict a regular monopoly?

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