Use the Information Below to Answer the Following Questions

question 78

Multiple Choice

Use the information below to answer the following questions.
Fact 13.5.1
Cascade Springs Inc. is a natural monopoly that bottles water from a spring high in the Rocky Mountains. The total fixed cost it incurs is $80,000, and its marginal cost is 10 cents a bottle. The demand curve for Cascade Springs bottled water is shown in the following figure:

Figure 13.5.1
-Refer to Figure 13.5.1. Suppose the government regulates the firm with average cost pricing. What is the price?

• A)$0 a bottle
• B)$0.50 a bottle
• C)$0.30 a bottle
• D)$0.10 a bottle
• E)$0.20 a bottle

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Definitions:

Wheat Rust

A disease caused by fungi that affects wheat crops, leading to significant yield losses.

Basidiomycete

Member of a phylum of fungi characterized by the production of sexual basidiospores.

Zygote Germination

The process by which a zygote begins to grow and develop into a new organism, typically after a period of dormancy in plants.

Meiosis

A type of cell division that reduces the chromosome number by half, resulting in the production of gametes or spores.