When a regulatory commission of a public utility, such as an electric company, chooses a fair price as the regulated price, it chooses P = MC.

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When a regulatory commission chooses a fair price for a public utility, it often sets the price where Average Total Cost (ATC) equals demand (P = ATC), not where Price equals Marginal Cost (P = MC), to ensure the company can cover its costs and maintain financial viability.

When a Regulatory Commission of a Public Utility, Such as an Electric