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Back to Assignment Attempts 28 2 Keep the Highest 2.8 / 3 6. Natural monopoly analysis The following graph shows the demand (D) for electricity seriices in the Imaginary town of Utilityburg. The graph also shows the marginal revenue (MR) curve, the marginal cost (MC) curve, and the average tical cost (ATC) curve for the local electricity 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. 40 -+ Monopoly Outcome PRICE (Cents per Kilowatt-hour) _QUANTITY (Thousands of kilowatt-hours) Which of the following statements are true about this natural monopoly? Check all that apply. () The electricity company must own a scarce resource. O It is more efficient on the cost side for one producer to exist in this market rather than a large number of producers. ) The electricity company is experiencing diseconomies of scale. The electricity company is experiencing economies of scale. True or False: Without government regulation, natural monopolies never earn zoro profit in the long run. O True O False Grade It Now Save & Continue Continue Without saving