-In the above figure, if the natural monopoly is NOT regulated then consumer surplus is
A) $48 million.
B) $60 million.
C) $108 million.
D) $192 million.

Question

-In the above figure, if the natural monopoly is NOT regulated then consumer surplus is
A) $48 million. 
B) $60 million. 
C) $108 million. 
D) $192 million.

Quizplus · Accepted Answer

In a natural monopoly, if it is not regulated, the firm will produce where marginal cost equals marginal revenue. The consumer surplus is the area above the price level and below the demand curve up to the quantity produced. Based on the given options, $48 million is the correct consumer surplus in this scenario.

-In the Above Figure, If the Natural Monopoly Is NOT