The following graph gives the demand (D) curve for satellite TV services in the fictional town of Streamship Springs. The graph also shows marginal revenue (MR) curve, the marginal cost (MC) curve, and the average total cost (ATC) curve for the local satellite TV company, a n monopolist. On the following graph, use the black point (plus symbol) to indicate the profit-maximizing price and quantity for this natural monopolist. ? (u 100 90 80 + Monopoly Outcome
The following graph gives the demand (D) curve for satellite TV services in the fictional town of Streamship Springs. The graph also shows marginal revenue (MR) curve, the marginal cost (MC) curve, and the average total cost (ATC) curve for the local satellite TV company, a n monopolist. On the following graph, use the black point (plus symbol) to indicate the profit-maximizing price and quantity for this natural monopolist. ? (u 100 90 80 + Monopoly Outcome
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter24: Price-searcher Markets With High Entry Barriers
Section: Chapter Questions
Problem 15CQ
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Transcribed Image Text:The following graph gives the demand (D) curve for satellite TV services in the fictional town of Streamship Springs. The graph also shows the
marginal revenue (MR) curve, the marginal cost (MC) curve, and the average total cost (ATC) curve for the local satellite TV 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.
PRICE (Dollars per subscription)
100
90
80
40
20
10
0
0
2
MR
4 6 8 10 12 14
QUANTITY (Number of subscriptions)
ATC
-MC-
O True
16 18 20
O False
D
Monopoly Outcome
Which of the following statements are true about this natural monopoly? Check all that apply.
?
The satellite TV company must own a scarce resource.
It is more efficient on the cost side for one producer to exist in this market rather than a large number of producer
The satellite TV company is experiencing economies of scale.
The satellite TV company is experiencing diseconomies of scale.
True or False: Without government regulation, natural monopolies can earn positive profit in the long run.
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