Exhibit 15-1 If regulators set price equal to marginal cost for the natural monopoly in Exhibit 15-1, then from the usual profit-maximizing position, price changes from
A)$24 to $18, and quantity increases from 5 to 8
B)$14 to $20, and quantity increases from 5 to 8
C)$24 to $18, and quantity remains unchanged
D)$24 to $22, and quantity increases from 5 to 10

Question

Exhibit 15-1  If regulators set price equal to marginal cost for the natural monopoly in Exhibit 15-1, then from the usual profit-maximizing position, price changes from
A)$24 to $18, and quantity increases from 5 to 8 
B)$14 to $20, and quantity increases from 5 to 8 
C)$24 to $18, and quantity remains unchanged 
D)$24 to $22, and quantity increases from 5 to 10

Quizplus · Accepted Answer

The Answer of Exhibit 15-1  If regulators set price equal to marginal cost for the natural monopoly in Exhibit 15-1, then from the usual profit-maximizing position, price changes from
A)$24 to $18, and quantity increases from 5 to 8 
B)$14 to $20, and quantity increases from 5 to 8 
C)$24 to $18, and quantity remains unchanged 
D)$24 to $22, and quantity increases from 5 to 10

Exhibit 15-1 If Regulators Set Price Equal to Marginal