Consider the monopoly in the above graph with price regulated at $2 per unit.In this market, ___________ units will be exchanged.
A)3
B)4
C)5
D)8

Question

Quizplus · Accepted Answer

At a price of $2, the quantity demanded is 4 units. However, the government has set a price ceiling of $2, which means that the price cannot go above $2. At this price, the quantity supplied is only 3 units. Therefore, the quantity exchanged will be 3 units.

Consider the Monopoly in the Above Graph with Price Regulated