Use Figure 14P-3 to answer the following questions.

a. Under monopoly pricing, are profits positive, negative, or zero?
b. If government regulates average total cost pricing (P = ATC), are profits positive, negative, or zero?
c. If government regulates efficient pricing, are profits positive, negative, or zero?
d. Is this a natural monopoly?

Transcribed Image Text:

Price S) 15 -ATC MC MR 0 2 3 4 5 6 7 8 9 10 11 Quantity