The following graph shows the demand (D) for electricity services in the imaginary town of Utilityburg. The graph also shows the marginal revenue (MR) curve, the marginal cost (MC) curve, and the average total cost (ATC) curve for the local electricity company, a natural monopolist. What is the profit maximizing price and quantity?
Which of the following statements are true about the natural monopoly?
a. It is more efficient on the cost side for one producer to exist is this market rather than a large number of producers.
b. In order for a monopoly to exist in this case, the government must have intervened and created it.
c. The electricity company is experiencing diseconomies of scale.
d. The electricity company must own a scare resource
True or False: Without government regulation, natural monopolies always earn zero profit in the long run?