The following questions all concern natural monopolies: a) Use a diagram to illustrate the deadweight loss that, in the absence of government…

The following questions all concern natural monopolies:

a) Use a diagram to illustrate the deadweight loss that, in the absence of government intervention, results from natural monopolies.

b) Briefly describe two government policies that can partially or entirely eliminate the deadweight loss resulting from natural monopolies.

c) Using your diagram, indicate the benefits, costs, and transfers that would result from implementing your policies.

 
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