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The figure below shows revenue and cost curves of a natural monopoly firm. Figure 26.1 In the figure,
D: Demand curve
MR: Marginal revenue curve
MC: Marginal cost curve
ATC: Average total cost curve
Refer to Figure 26.1.The natural monopolist will charge a price equal to:
Fixed Cost
Costs that do not vary with the level of production or sales, such as rent, salaries, or insurance premiums.
Eyeglasses
Corrective or protective lenses mounted in a frame to aid vision or protect the eyes.
Average Variable Cost
The cost per unit of variable inputs divided by the total quantity of output produced.
Variable Cost
Costs that change in proportion to the good or service that a business produces.
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