Consider the monopoly in the above graph with price regulated at $2 per unit.The regulated price will result in a
A)surplus of 2 units.
B)shortage of 2 units.
C)surplus of 5 units.
D)shortage of 5 units.

Question

Quizplus · Accepted Answer

When the price is regulated at $2 per unit, it is likely below the equilibrium price, leading to higher demand than supply, resulting in a shortage. The shortage is 5 units as per the given options.

Consider the Monopoly in the Above Graph with Price Regulated