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.Suppose this firm is being regulated using a pricing policy of average-cost pricing.In this case,economic profits are equal to
Definitions:
Availability
The extent to which a resource or service can be used or obtained.
Representativeness Heuristic
A cognitive shortcut used in decision making and judgments, where the likelihood of an object or event is assessed based on how closely it matches the typical case or stereotype.
Preexisting Beliefs
Ideas or convictions that an individual holds before being exposed to new information or experiences.
Availability Heuristic
A mental shortcut that relies on immediate examples that come to a person's mind when evaluating a specific topic, concept, method or decision.
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