Central Crude Oil is a crude oil monopoly in a market. The following table shows the liner demand schedule of this firm which cannot apply price discrimination. The firm's fixed cost is $2000 per month and its marginal cost is a constant of $20 per thousand of cubic feet.
Price (dollar per thousand cubic feet)
180 140 100 60 20
Quantity(thousands of cubic feet per month)
0 20 40 60 80
(a) Draw the demand curve faced by Central Crude Oil and the marginal revenue curve, as well as its marginal cost and average total cost curves.
(b) Is Central Crude Oil a natural monopoly? Why or why not?
(c) What are the firm's profit-maximizing output and price? What is the firm's economic profit per month?
I have already drawn the demand curve and marginal revenue curve, and I have no idea. about ''marginal cost and average total cost curve.'' ''Its marginal cost is a constant of $20 per thousand of cubic feet'' mentioned above confused me a lot.
I really want to know the solutions of question (a),(b),(c).
Thanks for your help!