If the government imposes a price ceiling below the monopolist's average cost curve,then in the long run the regulation makes:
A) consumers better off.
B) consumers worse off.
C) the monopolist better off.
D) None of the preceding statements is correct.

Question

Quizplus · Accepted Answer

Imposing a price ceiling below the monopolist's average cost curve means the monopolist cannot cover its costs in the long run, potentially leading to reduced production or exit from the market, which would make consumers worse off due to decreased availability of the product.

If the Government Imposes a Price Ceiling Below the Monopolist's