-The figure above shows the costs and demand curves for the Bigshow Cable Company. To avoid any deadweight loss in the market served by Bigshow, the regulator must set the price at
A) $8.
B) $6.
C) $4.
D) $2.

Question

-The figure above shows the costs and demand curves for the Bigshow Cable Company. To avoid any deadweight loss in the market served by Bigshow, the regulator must set the price at
A) $8. 
B) $6. 
C) $4. 
D) $2.

Quizplus · Accepted Answer

To avoid deadweight loss, the price should be set where the demand curve intersects the marginal cost curve, which is typically at the point where the price equals the marginal cost. In this scenario, that price is $4.

-The Figure Above Shows the Costs and Demand Curves for the Bigshow