Use the figure below to answer the following questions. Figure 12.3.4 -Consider the natural monopoly depicted in Figure 12.3.4.Total surplus is at a maximum when quantity is A)Q₁ and price is P₁. B)Q₁ and price is P₃. C)Q₂ and price is P₂. D)Q₃ and price is P₀. E)Q₄ and price is 0.

Question

Quizplus · Accepted Answer

Total surplus is maximized when the price equals marginal cost, which occurs at Q₃ and price P₀ in a natural monopoly.

Use the Figure Below to Answer the Following Questions