Natural Monopoly

Question

The graph below depicts a natural monopoly. If the firm is left unregulated, what would be the price and quantity? Illustrate and label the firm's economic profit or loss and tell the amount of the economic profit or loss. Illustrate and label the deadweight loss and tell what amount of the deadweight loss. If the firm was regulated with an average cost pricing rule, what would be the price and quantity? What would be the amount of the firm’s economic profit or loss? What is the amount of the deadweight loss? By how much does the consumer surplus change when the firm changes from being unregulated to regulated with a marginal cost pricing rule?

https://imagetolink.com/ib/FJqkrPh4Zw

Answer 1

Natural monopoly based on graph