Refer to the graph for a pure monopoly. If the government regulated the monopoly and made it charge the socially optimal price, this price would be
A)higher than the profit-maximizing price.
B)higher than the fair-return price.
C)lower than both the fair-return price and the profit-maximizing price.
D)between the fair-return price and the profit-maximizing price.

Question

Refer to the graph for a pure monopoly. If the government regulated the monopoly and made it charge the socially optimal price, this price would be
A)higher than the profit-maximizing price. 
B)higher than the fair-return price. 
C)lower than both the fair-return price and the profit-maximizing price. 
D)between the fair-return price and the profit-maximizing price.

Quizplus · Accepted Answer

The Answer of  Refer to the graph for a pure monopoly. If the government regulated the monopoly and made it charge the socially optimal price, this price would be
A)higher than the profit-maximizing price. 
B)higher than the fair-return price. 
C)lower than both the fair-return price and the profit-maximizing price. 
D)between the fair-return price and the profit-maximizing price.

Refer to the Graph for a Pure Monopoly