On the monopoly firm graph above, draw each of the
following:

*Draw a marginal cost curve (MC).
*Monopoly profit-maximizing P (P) and Q (Q).
*Draw an ATC where the natural monopoly is earning

  
an economic profit > 0.
*Shade in the area of economic profit.

Indicate the Q on the graph if the government wants to

have the firm
:

*earn economic profit = 0
.  Label as (1).
*produce the allocatively efficient
quantity.  Label as (2).
*produce the productively efficient
quantity.  Label as (3).