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Fast-track is the train system that serves the state of Wond…

Posted byAnonymous June 24, 2026

Questions

Fаst-trаck is the trаin system that serves the state оf Wоnderland. The firm's cоst, revenue, and demand information are given below. Based on the table, complete the table and the following three regulation scenarios: Cost and revenue for Fast-track Q (million of riders) Price (P) Total Cost (million $) Total Revenue (million $) Marginal Cost (MC) Marginal Revenue (MR) Average Cost (AC) 1 30 20 30 -- [option2] 20 2 26 38 52 18 22 19 3 23.3 54 69.9 16 17.9 18 4 21 68 84 [option1] 14.1 17 5 18 80 90 12 6 [option3] 6 15 90 90 10 0 15 7 10 98 70 8 -20 14 8 6 104 48 6 -22 13 A profit-maximizing unregulated natural monopoly will produce at the quantity where [option4], hence charging [option5] and having a profit of 160.  If the government decides to regulate this natural monopoly by forcing them to produce at the point where the demand curve intersects the marginal cost, or at [option6], then the firm would have [option7]. If the government decides to regulate this natural monopoly by forcing them to sell the quantity and charge the price where the market demand curve crosses the average cost curve, the quantity would be [option8], the market price would be [option9], and this firm will [option10].  The best regulatory choice is [option11] because the firm [option12].

Tags: Accounting, Basic, qmb,

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