Question 12 (1 point)
City Gas is a natural monopoly that supplies natural gas to a particular city. Its cost and demand information are given below. (Hint: P = Demand)
Total Cost (million \$)
Quantity (Millions of therms) Price (\$ per therm)
1 48 35
2 44 64
3 38 90
4 30 113
5 20 133
6 8 150
If the government decides to regulate this natural monopoly by forcing them to produce at the point where the demand curve intersects marginal cost, then the firm will make a \_\_\_\_\_\_\_\_\_\_\_\_\_\_ and \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ continue in the long run.
profit of \$33 million, will
loss of \$33 million, will not
profit of \$24 million, will
loss of \$24 million, will not