The Following Figure Shows the Average Cost [AC],marginal Cost [MC],and

question 52

Multiple Choice

The following figure shows the average cost [AC],marginal cost [MC],and demand [D] curves for a natural monopoly;Qi denotes quantity and Pi denotes price.
Figure 15-3
-In Figure 15-3,if the monopoly is forced to use the average-cost pricing policy,it would:

• A)produce Q2 at a price P3 and make zero economic profit.
• B)produce Q3 at a price P4 and make positive economic profit.
• C)produce Q1 at a price P1 and make zero economic profit.
• D)produce Q2 at a price P3 and make positive economic profit.

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