Interactive Natural Monopoly Diagram

Explore unregulated profit maximisation, average cost pricing, and marginal cost pricing for a natural monopoly. See how economies of scale create the case for regulation. Built for AQA, Edexcel and OCR.

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Price / Cost (£)Quantity (Q)2040608010020406080100120AR = DMRLRACLRMCQ_pmQ_acP_pmP_aclearnwithotti.co.uk/diagrams
Q_pm
54.5
P_pm
£60.9
Q_ac
96.3
P_ac
£23.4
Q_me
106.4*
P_me
£14.2

* Q_me beyond displayed range — lower B or raise arSlope to bring on-chart.

Demand (AR = D)

Demand intercept110
Demand slope0.90

Steeper slope = more inelastic demand

MR is derived from AR — it falls at twice the slope. MR = 0 at Q = 61.1, the revenue-maximising output.

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