Assume that electricity production has been done by several regional firms in the U.S. each operating as a pure monopoly.

Now the federal government decides to deregulate the market for electricity nationwide. Draw a new monopoly graph for part 3.

1. Show and explain how deregulation will impact price and output in the now perfectly competitive market for electricity production. (Hint: You should use a monopoly graph to show where the perfectly competitor would set price and quantity.) (Label Ppc and Qpc)
2. Identify any area of consumer surplus and/or producer surplus for the de-regulated monopoly.