The following question are based on the following graph showing the demand and cost curves of a regulated monopolist. Assume the cost curves include provisions for "fair" rates of return.

-This regulated price ensures that the output rate is
A) higher than if the monopolist were unregulated.
B) lower than if the monopolist were unregulated.
C) the same as if the monopolist were unregulated, but the price would be lower.
D) the same as if the industry were perfectly competitive.
E) impossible to determine from the graph.

Question

The following question are based on the following graph showing the demand and cost curves of a regulated monopolist. Assume the cost curves include provisions for "fair" rates of return.
 
-This regulated price ensures that the output rate is
A) higher than if the monopolist were unregulated. 
B) lower than if the monopolist were unregulated. 
C) the same as if the monopolist were unregulated, but the price would be lower. 
D) the same as if the industry were perfectly competitive. 
E) impossible to determine from the graph.

Quizplus · Accepted Answer

When a monopolist is regulated, typically the regulation aims to lower prices to consumers, which can often result in a higher output rate than if the monopolist were left to operate unregulated. In an unregulated scenario, a monopolist might restrict output to raise prices and maximize profits.

The Following Question Are Based on the Following Graph Showing