The following table gives the cost and demand data for a monopolist:

-Refer to the above information to answer this question.Suppose that the monopolist is regulated and forced to charge a fair-return price.What will be the level of profit or loss?
A)$0.
B)Loss of $3.
C)Loss $25.2.
D)Profit of $12.
E)Profit of $60.

Question

The following table gives the cost and demand data for a monopolist:
 
-Refer to the above information to answer this question.Suppose that the monopolist is regulated and forced to charge a fair-return price.What will be the level of profit or loss?
A)$0. 
B)Loss of $3. 
C)Loss $25.2. 
D)Profit of $12. 
E)Profit of $60.

Quizplus · Accepted Answer

When a monopolist is regulated to charge a fair-return price, it means they are required to set the price where average total cost (ATC) equals demand, which typically results in zero economic profit. This ensures the firm covers all its costs, including a normal return on investment, but does not earn excess profits.

The Following Table Gives the Cost and Demand Data for a Monopolist