Consider the monopoly in the figure below with price regulated at $20 per unit.The regulated price will result in a:
A) surplus of 3 units.
B) shortage of 3 units.
C) surplus of 18 units.
D) shortage of 18 units.

Question

Quizplus · Accepted Answer

At the regulated price of $20, the monopoly will produce 15 units and demand will be 33 units. Therefore, there will be a shortage of (33 - 15) = 18 units.

Consider the Monopoly in the Figure Below with Price Regulated