Figure: Total Surplus with a Regulated Natural Monopolist

Essay

Figure: Total Surplus with a Regulated Natural Monopolist
(Figure: Total Surplus with a Regulated Natural Monopoly) Look at the figure Total Surplus with a Regulated Natural Monopolist.In the figure, the natural monopoly:
A.would incur an economic profit if regulated to produce where price is less than marginal cost.
B.would incur an economic profit if regulated to charge a price equal to average total cost.
C.creates more consumer surplus than an unregulated monopolist if regulated to produce either where price equals marginal cost or price equals average total cost.
D.creates more consumer surplus than an unregulated monopolist if regulated to produce where price is above the average total cost.