5. Which of the following situations is a natural monopoly? (Check all that apply.)

a- One company owns almost all available bauxite (the mineral needed to produce aluminum).

b- The U.S. Postal Service is given the exclusive right to deliver first-class mail.

c- One water supplier in a city can provide the service at a lower average cost than two or more suppliers could.

d- The only electricity supplier in a region experiences diseconomies of scale.

6. When a firm charges $70 per unit of its product, the quantity of the product demanded is 800 units. When the firm lowers the price to $67, the quantity demanded increases to 1000 units. What is the firm's marginal revenue from the 900^th unit? ($)?

7. A monopoly chooses the output level where _____.

a- MC = ATC

b- MR = ATC

c- MC = P

d- MR = P

e- MC = MR

8. Suppose Westland is the only cable TV provider in a city. The table below shows the demand schedule the firm faces and its total costs.

A. What is Westland's optimal number of subscribers?

B. In the scenario above, Westland's optimal price is $_

C. In the scenario above, what is Westland's profit? ($)

Price Quantity Total cost ($/month) (subscribers) ($/month) 56 20,000 1,000,000 54 24,000 1, 156,000 52 28,000 1,316,000 50 32,000 1,480,000 48 36,000 1,648,000