Exhibit 15-5
-Consider the natural monopoly depicted in exhibit 15-5. To achieve the socially efficient level of output, regulators should set the price at what level?

Question

Exhibit 15-5 
-Consider the natural monopoly depicted in exhibit 15-5. To achieve the socially efficient level of output, regulators should set the price at what level?

Quizplus · Accepted Answer

The socially efficient level of output in a natural monopoly is achieved when the price is set equal to the marginal cost. In this scenario, the price of $5 is likely the marginal cost, leading to the socially efficient output level.

Exhibit 15-5 -Consider the Natural Monopoly Depicted in Exhibit 15-5. to Achieve