Discuss the pros and cons of two monopoly regulation methods and evaluate their effectiveness:

The figure below represents the cost and demand curves for a natural monopoly that is regulated using a marginal cost pricing rule.   What is the consequence of this policy on the firm and the government?

Describe two different fundamental ways that a firm can try to move towards being a monopoly

Consider the only electric company in a small town, which you can assume operates as a natural monopoly. The following graph shows the demand curve for electricity services per month, as well as the provider's marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve. Suppose the government has elected not to impose regulations on the industry, and so the firm faces no regulatory constraints in maximizing profits. Complete the first row of the following table. Pricing Mechanism Short Run Long - Run Decision Quantity Price Profit (Subscriptions) (Dollars per subscription) Profit Maximization Marginal - Cost Pricing Average - Cost Pricing Suppose now that the government decides to require the monopolist to set its price equal to marginal cost. Complete the second row of the previous table. Suppose now that the government decides to require the monopolist to set its price equal to average total cost. Complete the third row of the previous table. True or…