. Natural monopoly analysis The following graph gives the demand (D) curve for satellite TV services in the fictional town of Streamship Springs. The graph also shows the marginal revenue (MR) curve, the marginal cost (MC) curve, and the average total cost (ATC) curve for the local satellite TV 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. a)Which of the following statements are true about this natural monopoly? Check all that apply. O. In order for a monopoly to exist in this case, the government must have intervened and created it. O. The satellite TV company must own a scarce resource. O. It is more efficient on the cost side for one producer to exist in this market rather than a large number of producers. O. The satellite TV company is experiencing diseconomies of scale. b) True or False: Without government regulation, natural monopolies can earn positive profit in the long run. True False
8. Natural
The following graph gives the
On the following graph, use the black point (plus symbol) to indicate the profit-maximizing price and quantity for this natural monopolist.
a)Which of the following statements are true about this natural monopoly? Check all that apply.
O. In order for a monopoly to exist in this case, the government must have intervened and created it.
O. The satellite TV company must own a scarce resource.
O. It is more efficient on the cost side for one producer to exist in this market rather than a large number of producers.
O. The satellite TV company is experiencing diseconomies of scale.
b) True or False: Without government regulation, natural monopolies can earn positive profit in the long run.
True
False
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