Solve the following question

Q1: Figure 1 below shows the cost curves of a natural monopoly. Figure 1 As a regulated monopoly, if it chooses to adopt an Average cost pricing rule, it should set its price at $ 0 4 Q 5 0 1o 0 15 v Section B (2) Marks:5 Refer to Extract 1 to answer all the questions in this section. Extract 1 The objective of a proposed tax on high-sugar pre-packaged drinks is not to boost government revenue but to ensure that it is effective in reducing undesirable issues of obesity and diabetes, Senior Minister of State for Health Edwin Tong said yesterday. "If we impose taxes and we end up collecting more taxes, then I think something is not right. Because it means consumers are willing to pay higher prices to consume sugary drinks, " Mr Tong told participants at a dialogue. Ms Stephanie Lim, founder of an interest group, hopes that the proposed taxes on suppliers of such drinks would not simply end up getting passed on to consumers, in turn driving up prices. Adapted from: Sugar tax to change behaviour, not boost revenues, Retrieved 2 Aug 2020 from The Straits Times website: https://www.straitstimes.com/singapore/health/sugar.tax-to-change-behaviour-not-boost-revenues Q2: Based on Extract 1, state and explain the type of externality present using TWO (2) piece of evidence from the Marks:2 article Note: You can enter a maximum of 8000 characters and you have already entered 0 characters