Mathematics
Mathematics, 09.03.2020 18:02, prettyprincess9643

Consider the special case and assume that for a natural monopolist the marginal cost is constant and there is high fixed cost. Show graphically how the natural monopolist maximizes economic profits. At the point of profit maximization, what is the monopoly price and what is the monopoly quantity? Suppose now the natural monopoly is regulated. What is the best regulated price? What happens to economic profits with the regulation? How is the consumer surplus changed due to the regulation? Show graphically.

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Consider the special case and assume that for a natural monopolist the marginal cost is constant and...

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