Author Question: Consider the following information for a regional cable television service provider that is a ... (Read 94 times)

wqwpfwpoefnpwenf · **on:** Oct 12, 2022

Consider the following information for a regional cable television service provider that is a natural monopoly and has a U-shaped long-run average cost curve. (Assume the service provided is basic cable and units are household connections.)
- minimum LRAC = $9.00 per month
- minimum efficient scale = 2 million units
- current output = 1.7 million units
- current LRAC = $10.25 per month
If this firm is currently being regulated and is following an average-cost pricing policy, the price of service is ________ per month.
◦ lower than $9.00
◦ $9.00
◦ between $9.00 and $10.25
◦ $10.25
◦ higher than $10.25

saly · **Reply #1 on:** Oct 12, 2022

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