A fair price for a regulated monopoly is for the regulatory commission to set price equal to
A) marginal cost
B) marginal revenue
C) economic profit
D) average total cost
E) normal profit

Question

Quizplus · Accepted Answer

A fair price for a regulated monopoly is often set equal to average total cost to allow the company to cover all its costs and earn a normal profit without achieving excess profit. This approach ensures the company can sustain its operations while preventing it from exploiting its monopoly power to charge excessively high prices.

A Fair Price for a Regulated Monopoly Is for the Regulatory