Author Question: Gene's Car Wash is a natural monopoly. To wash 100 cars a week, if Gene is unregulated, he would ... (Read 72 times)

notis · **on:** Jun 29, 2018

Gene's Car Wash is a natural monopoly. To wash 100 cars a week, if Gene is unregulated, he would charge a price of 10. Gene's long-run average cost for washing 100 cars is 8, his average variable cost is 6, and his marginal cost is constant at 4.

If Gene was regulated using a marginal cost pricing rule, the price he would be allowed to charge to wash 100 cars is A) 10.
B) 8.
C) 6.
D) 4.

Question 2

Janelle spends all of her income on songs from iTunes (1 each) and applications (5 each) for her iTouch. If she makes her best affordable choice, she purchases 20 songs and 4 applications, what is her income?

A) 40
B) 20
C) 30
D) 25