(Answered) Question - the graph below depicts a natural monopolya if

Economics

Question - The graph below depicts a Natural Monopoly.

a. If this firm were unregulated at which price would it maximize its profits?

b. If threatened with the entry of a competitor what price would the existing firm charge? Explain.

c. Give an example of a company or industry that can be characterized as a Natural Monopoly. Explain (using an economic rationale, for example along the lines of the two questions above) why the government often regulates the pricing and output of these firms.

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