8. Natural monopoly analysis The following graph shows the demand (D) for electricity services in the imaginary town of Utilityburg. The graph also shows the marginal revenue (MR) curve, the marginal cost (MC) curve, and the average total cost (ATC) curve for the local electricity 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. 40 36 Monopoly Outcome 32 28 24 20 PRICE (Cents per Kilowatt-hour) 16 12 ATC CO MCd0 ' II' 36 ' 32 Monopoly Outcome 2:3 24 20 16 12 PRICE (Cents per Kilowatthour) o 1 2 3 a 5 a 7 a 9 10 QUANTITY ('I'housands of kilowatthours) Which of the following statements are true about this natural mono-poly? Check all that apply. .1 . a I. . . . . MR. . . . D o 1 2 3 4 5 o 7 a 9 1o QUANTITY (Thousands of kilowatthours) which of the following statements are true about this natural monopoly? Check all that apply. CI .t is more efficient on the cost side for one producer to exist in this market rather than a large number of producers. 'he electricity company is experiencing diseconomies of scale. D D 'he electricity company is experiencing economies of scale. D 'he electricity company must own a scarce resource. True or False: Without government regulation, natural monopolies always earn zero prot in the long run. 0 True 0 False N Save 8: Continue Continue without saving