Figure 15-9
Figure 15-9 shows the cost and demand curves for the Erickson Power Company.
-Refer to Figure 15-9.If the government regulates Erickson Power Company so that the firm can earn a normal profit,the price would be set at ________ and the output level is ________.

Question

Figure 15-9  
Figure 15-9 shows the cost and demand curves for the Erickson Power Company.
-Refer to Figure 15-9.If the government regulates Erickson Power Company so that the firm can earn a normal profit,the price would be set at ________ and the output level is ________.

Quizplus · Accepted Answer

To earn a normal profit, the price should be set where average total cost (ATC) equals the price. This typically occurs at P2, Q3 in regulated monopoly scenarios.