At a certain level of production,the average total cost faced by a monopolist is $6 and the marginal cost faced by the monopolist is $4.If the government decides to regulate the market by setting the price at the efficient price,the good will be sold at a price of ________.

Question

Quizplus · Accepted Answer

If the monopolist operates at a level of production where the marginal cost equals the average total cost, it means that the firm is producing at the efficient scale. This is because the efficient scale occurs where the marginal cost intersects the average total cost, and at this point, the firm produces at the minimum cost possible. 
Therefore, the efficient price is equal to the marginal cost, which is $4 in this case. Thus, the regulated price should be set at $4 per unit. Therefore, the correct choice is B.

At a Certain Level of Production,the Average Total Cost Faced