Figure 15-21
-Refer to Figure 15-21. Which of the following areas describes the profit of this natural monopolist under socially optimal pricing?
A)ABCE
B)0HIL
C)0FGK
D)None of the above is correct.

Question

Figure 15-21 
-Refer to Figure 15-21. Which of the following areas describes the profit of this natural monopolist under socially optimal pricing?
A)ABCE 
B)0HIL 
C)0FGK 
D)None of the above is correct.

Quizplus · Accepted Answer

Under socially optimal pricing, a natural monopolist sets price equal to marginal cost, which typically results in zero economic profit. Therefore, none of the areas listed would represent profit.

Figure 15-21 -Refer to Figure 15-21. Which of the Following Areas Describes