Author Question: Consider the following information for a regional cable television service provider that is a ... (Read 88 times)

Hunchojack2019!! · **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
Suppose the firm is currently being regulated and is required to follow a marginal-cost pricing policy. The price of the service will be ________ per month.
◦ $10.25
◦ $9.00
◦ higher than $10.25
◦ lower than $10.25
◦ lower than $9.00

GoldenBrown · **Reply #1 on:** Oct 12, 2022

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