In the above figure, S1 represents the supply curve which includes private costs, and S2 is the supply curve which includes social costs. If the firm is producing a product that has external costs that the firm does have to pay, what will be the equilibrium price and quantity?

The figure above provides information about Light-U-Up Utilities, which is a natural monopoly that provides electricity. If Light-U-Up is regulated, what is its economic profit if it must follow a marginal cost pricing rule?

A) -$40 B) -$20 C) $0 D) $30

If the production technology in a Robinson Crusoe economy has increasing returns to scale, there is not competitive equilibrium.

Answer the following statement true (T) or false (F)