The Following Diagram Contains Information on Cost and Revenue Curves

question 70

Multiple Choice

The following diagram contains information on cost and revenue curves facing a regulated monopoly.
FIGURE 9-3

-Refer to Figure 9-3. If regulators set a price according to average-cost pricing, what can we conclude about the firm?

• A) It will make zero economic profits.
• B) It will suffer an economic loss.
• C) It will earn the same level of profits as it would absent regulation.
• D) It will earn positive economic profits.

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