The following graph shows the demand (D) for cable services in the imaginary town of Utilityburg. The graph also shows the margi
nal revenue (MR) curve, the marginal cost (MC) curve, and the average total cost (ATC) curve for the local cable 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.
Which of the following statements are true about this natural monopoly? Check all that apply.
The cable company must own a scarce resource.
In order for a monopoly to exist in this case, the government must have intervened and created it.
The cable company is experiencing diseconomies of scale.
The cable company is experiencing economies of scale.
True or False: Without government regulation, natural monopolies can earn positive profit in the long run.
True
False
On the following graph, use the black point (plus symbol) to indicate the profit-maximizing price and quantity for this natural monopolist.
Which of the following statements are true about this natural monopoly? Check all that apply.
The cable company must own a scarce resource.
In order for a monopoly to exist in this case, the government must have intervened and created it.
The cable company is experiencing diseconomies of scale.
The cable company is experiencing economies of scale.
True or False: Without government regulation, natural monopolies can earn positive profit in the long run.
True
False
1 answer:
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Answer:
Normal goods have a positive relationship with income & purchasing power parity (PPP) with an increase in income ( I ) consumption of normal goods also increased respectively.
So, with the increase in students' income consumption of Pizza will be increased
As normal goods have a positive income elasticity of demand coefficient but it will be less than one.
Explanation:
Let’s discuss the normal goods, as a decrease in the price of normal goods its consumption will boost or increase. As when normal goods become cheaper, they will be consumed much as we know that people will consume them because of the logical reasoning of cheaper than its substitutes. Likewise, with an increase in income, its consumption will also increase but at a stage where it will become inelastic or constant.
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