Rocky's Mountain Water is an unregulated natural monopoly that bottles fresh spring water. The figure shows the demand for Rocky's Mountain Water. Marginal cost is $0.20 per bottle. What is the price of a bottle of Rocky's Mountain Water?

$0.20
$0.30
$0.40
$0.50

Rocky's Mountain Water is an unregulated natural monopoly that bottles fresh spring water. The figure shows the demand for Rocky's Mountain Water. Marginal cost is $0.20 per bottle. Rocky's maximizes ______.

producer surplus
total surplus
consumer surplus
output

The government decides to regulate Rocky's Mountain Water by imposing a marginal cost pricing rule. The figure shows the demand for Rocky's Mountain Water. Marginal cost is $0.20 per bottle. The price of a bottle of Rocky's Mountain Water is __________ and it sells _________ thousand bottles a month.

$0.50; 300
$0.50; 150
$0.20; 600
$0.20; 300

The government decides to regulate Rocky's Mountain Water by imposing a marginal cost pricing rule. The figure shows the demand for Rocky's Mountain Water. Marginal cost is $0.20 per bottle. Each month, consumer surplus is _________ and producer surplus is ______.

$180,000; zero
zero; $18,000
zero; $180,000
$18,000; zero

The government decides to regulate Rocky's Mountain Water by imposing an average cost pricing rule. The figure shows the demand for Rocky's Mountain Water. Marginal cost is $0.20 per bottle and the total fixed cost per month is $80,000. The price of a bottle of Rocky's Mountain Water is _______and it sells ______ thousand bottles a month.

$0.40; 400
$0.60; 150
$0.20; 600
$0.40; 200

The government decides to regulate Rocky's Mountain Water by imposing an average cost pricing rule. The figure shows the demand for Rocky's Mountain Water. Marginal cost is $0.20 per bottle and the total fixed cost per month is $80,000. Producer surplus is ________ a month.

$80
$80,000
$320
$320,000

The average cost pricing rule ________________________.

is totally in the public interest
maximizes surpluses
is neither totally in the public interest nor in the private interest
is totally in the private interest

The value of capital that Rocky has invested in his business is $1 million. The government introduces a rate of return regulation requiring Rocky to sell his Mountain Water at a price that gives a rate of return of 3 percent on his capital. The figure shows the demand for Rocky's Mountain Water. Marginal cost is $0.20 per bottle and the total fixed cost per month is $80,000. The price of a bottle of Rocky's Mountain Water is _______.

$0.40
impossible to calculate
$0.80
$0.48

The value of capital that Rocky has invested in his business is $1 million. The government introduces a rate of return regulation requiring Rocky to sell his Mountain Water at a price that gives a rate of return of 3 percent on his capital. The figure shows the demand for Rocky's Mountain Water. Marginal cost is $0.20 per bottle and the total fixed cost per month is $80,000. The deadweight loss created is ______.

zero
impossible to calculate
$20
$20,000

The value of capital that Rocky has invested in his business is $1 million. The government introduces a rate of return regulation requiring Rocky to sell his Mountain Water at a price that gives a rate of return of 3 percent on his capital. The figure shows the demand for Rocky's Mountain Water. Marginal cost is $0.20 per bottle and the total fixed cost per month is $80,000. Rocky decides to pad his costs in order to maximize producer surplus. Rocky will inflate his costs by ___________ a month.

$69,000
$9,000
$90,000
$9

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