Question: 1. The table below shows the demand curve and the long-run average cost curve for a natural monopoly. Price $12 $10 $8 $7 $6

1. The table below shows the demand curve and the long-run average cost curve for a natural monopoly. Price $12 $10 $8 $7 $6 Quantity Demanded 100 200 300 400 500 LRAC $6.00 $5.50 $5.33 $5.50 $6.00 A. What quantity will be produced in this market? B. What will the price be in this market? C. What will this firm's profits equal? Hint: The profit-maximizing choice for the monopoly will be to produce at the quantity where marginal revenue is equal to marginal cost: that is, MR you need to find the quantity where MR comes closest to MC. - VIC. Thus,

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