-Refer to the diagram above.Assume that the regulator sets the market price and level of output that are consistent with the maximum total economic surplus.This can only be done if
A) it subsidizes the monopoly.
B) it imposes the cost-plus regulation simultaneously.
C) it is prepared to allow the monopolist to earn excess profit.
D) it chooses the technology the firm will use.
E) it is prepared to choose the most qualified board of directors for the firm.

Question

-Refer to the diagram above.Assume that the regulator sets the market price and level of output that are consistent with the maximum total economic surplus.This can only be done if
A) it subsidizes the monopoly. 
B) it imposes the cost-plus regulation simultaneously. 
C) it is prepared to allow the monopolist to earn excess profit. 
D) it chooses the technology the firm will use. 
E) it is prepared to choose the most qualified board of directors for the firm.

Quizplus · Accepted Answer

The Answer of 
-Refer to the diagram above.Assume that the regulator sets the market price and level of output that are consistent with the maximum total economic surplus.This can only be done if
A) it subsidizes the monopoly. 
B) it imposes the cost-plus regulation simultaneously. 
C) it is prepared to allow the monopolist to earn excess profit. 
D) it chooses the technology the firm will use. 
E) it is prepared to choose the most qualified board of directors for the firm.

-Refer to the Diagram Above