Refer to the graph below for next two questions. This is the first of two related questions.
Question Get Answer

Refer to the graph below for next two questions.      This is the first of two related questions.

 

If the government regulates the price of this natural monopolist to achieve a perfectly competitive output level, the regulated price will be:

Question 22 options:


$10


$6.30


$8.15


$14

Question 23 (1 point)

 








This is the second of two related questions.


Which of the following statement is true in this case?

Question 23 options:


The firm will go out of business because LATC is greater than LMC.


The firm will continue to be in the business even though LATC is greater than LMC since it is a monopolist.


The firm will continue to be in the business even though LATC is greater than LMC since government regulates the price of the monopolist.


The firm will go out of business because natural monopolies in general don't make profits in long run. 

Subject: Business, Economics

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