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The following diagram shows the LRAC and MC curves for a natural monopoly-long-run average costs are falling over tt entire range of the demand curve. (FIGURE CAN'T COPY) a. Show on the diagram the price and quantity that wo exist if the firm were required by regulators to set pr equal to average cost. b. In the diagram, show the profits (or losses) in this ca c. Would the outcome be allocatively efficient? Explain or why not. d. Suppose that the firm were required by regulators to price equal t
The following diagram shows the LRAC and MC curves for a natura…
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