Use the Following to Answer Questions

question 344

Multiple Choice

Use the following to answer questions:
Figure: Water Works
-(Figure: Water Works) Look at the figure Water Works, which describes a small town's water works, a natural monopoly. If regulators allow the water works to charge the price that covers average total costs, consumer surplus will be:

• A) $1,600.
• B) $1,400.
• C) $1,000.
• D) $2,812.50.

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