The diagram below shows cost and revenue curves for a natural monopoly producing electricity. Price is dollars per kilowatt hour and quantity is kilowatt hours per day.
FIGURE 12-7
-Refer to Figure 12-7. If this firm were unregulated and profit maximizing, its price and output would be
Per kwh and kwh per day.
Definitions:
Return on Investment
Return on Investment, or ROI, measures the gain or loss generated on an investment relative to the amount of money invested.
Invested Assets
Financial assets purchased with the expectation that they will generate income or profit, or appreciate in value.
Operating Income
Earnings before interest and taxes (EBIT) is a company's profit from normal operations, excluding non-operating income and expenses.
Return on Investment
A financial metric used to evaluate the efficiency of an investment, calculated as the net gain or loss on the investment relative to the cost of the investment.
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