Which of the following statements are true about this natural monopoly? Check all that apply. The gas company is experiencing diseconomies of scale. It is more efficient on the cost side for one producer to exist in this market rather than a large number of producers. | The gas company must own a scarce resource. O In order for a monopoly to exist in this case, the government must have intervened and created it. True or False: Without government regulation, natural monopolies always earn zero profit in the long run. O True False
Which of the following statements are true about this natural monopoly? Check all that apply. The gas company is experiencing diseconomies of scale. It is more efficient on the cost side for one producer to exist in this market rather than a large number of producers. | The gas company must own a scarce resource. O In order for a monopoly to exist in this case, the government must have intervened and created it. True or False: Without government regulation, natural monopolies always earn zero profit in the long run. O True False
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter24: Price-searcher Markets With High Entry Barriers
Section: Chapter Questions
Problem 12CQ
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The following graph shows the demand (D) for gas services in the imaginary town of Utilityburg. The graph also shows the marginal revenue (MR) curve, the marginal cost (MC) curve, and the average total cost (ATC) curve for the local gas company, a natural monopolist.
On the following graph, use the black point (plus symbol) to indicate the profit-maximizing price and quantity for this natural monopolist.
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