Author Question: Mountain Water is a natural monopoly. The government decides to regulate Mountain Water by imposing ... (Read 105 times)

Alygatorr01285 · **on:** Jun 29, 2018

Mountain Water is a natural monopoly. The government decides to regulate Mountain Water by imposing a marginal cost pricing rule. The figure above shows the demand for Mountain Water. Marginal cost is 0.20 per bottle.

The price of a bottle of Mountain Water is ________, and ________ thousand bottles are sold per month. A) 0.20; 400
B) 0.50; 250
C) 0.20; 500
D) 1.00; 500

Question 2

If the interest rate increases from 5 percent to 7 percent, the present value of a future payment

A) rises.
B) falls.
C) is unaffected.
D) might either rise or fall.