Refer to Scenario 12.3. What is the monopoly price of this new drink?

In Delaware County, Pennsylvania, all homes, businesses, and other organizations purchase their water from one seller, Philadelphia Suburban Water Co (PSWCo)

Economists refer to public utility companies like PSWCo as natural monopolies because their A) marginal cost curves lie everywhere beneath their average fixed cost curves. B) marginal cost curves lie everywhere beneath their demand curves. C) average total cost curves lie everywhere above their demand curves. D) None of the above answers is correct.

Assume a competitive market has firms earning large economic profits. What is expected to happen over time in this competitive market and to firm's profits?