please provide a clear figure with explanation(s) to support argument(s): a) Suppose that the NBN Co is a natural monopoly and that it adopts an
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please provide a clear figure with explanation(s) to support argument(s):

a) Suppose that the NBN Co is a natural monopoly and that it adopts an average-cost pricing strategy. Do you think this pricing strategy is efficient from welfare standpoint? Explain your answer.


b) Now suppose that the NBN Co is a natural monopoly but that it adopts a marginal-cost pricing strategy. Do you think this pricing strategy is efficient from welfare standpoint? Explain your answer.


c) Of the above two pricing strategies (average-cost and marginal cost pricing strategies), which one would you recommend to the NBN Co so that it can fulfill its objective as a state-owned company? [Hint: You can construct one figure for use in both parts a) and b).]


https://www.nbnco.com.au/content/dam/nbnco2/2020/documents/media-centre/corporate-plan2021/nbnco-corporate-plan-2021.pdf.

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