micro economics

c. The figure below represents the cost and demand curves for a natural monopoly that is regulated using a marginal cost pricing rule. Price and cost (dollars per unit) CRAC MC D Quantity [thousands of units per month] (i) What would be the quantity and price under this policy? (2 marks) (ii) What is the consequence of this policy on the firm and the government? (2 marks) (iii) Is this policy financially sustainable in the long run? Explain your answer. (2 marks) (v) Identify the area in the graph above that represents consumer surplus when the firm is regulated using marginal cost pricing? What would happen to the consumer surplus if the government decide to set a fair return price? (2 marks)