Table 15-9 Consider the following demand and cost information for a monopoly. Quantity Total Cost $6 $20 $34 $48 $62 $76 10 11 2 3 14 QUESTION 30 15 Price $32 $28 $24 $20 $16 $12 Refer to Table 15-9. What is the marginal revenue of the 3rd unit? O a. $20 O b. $28 O c. $4 O d. $12

Q24 and q25

PRICE (Cents per Kilowatt-hour) 5 MR 2 QUANTITY (Thousands of kilowatt-hours) ATC MC 10 O True Which of the following statements are true about this natural monopoly? Check all that apply. O False D The electricity company must own a scarce resource. It is more efficient on the cost side for one producer to exist in this market rather than a large number of producers. Monopoly Outcome In order for a monopoly to exist in this case, the government must have intervened and created it. The electricity company is experiencing economies of scale. ? True or False: Without government regulation, natural monopolies can earn positive profit in the long run.

Refer to Table 1. Over which range of output is average revenue equal to price? Table 1 OO Quantity Price $5 $5 $5 $5 $5 $5 $5 $5 $5 $5 2 3 4 5 6 7 9 1 to 5 units 3 to 7 units 5 to 9 units 1 Average revenue is equal to price over the entire range of output.