The accompanying diagram depicts a monopolist whose price is regulated at $10 per unit. Use this figure to answer that follow.
a What price will an unregulated monopoly charge?
b What quantity will an unregulated monopoly produce?
c How many units will a monopoly produce when the regulated price is $10 per unit?
d Determine the quantity demanded and the amount produced at the regulated price of $10 per unit. Is there a shortage or a surplus?
e Determine the deadweight loss to society (if any) when the regulated price is $10 per unit.
f Determine the regulated price that maximizes social welfare. Is there a shortage or a surplus at this price?
a. If unregulated, the monopoly will produce until MR = MC, and at this point, the price is 12.
b. the quantity is 4.
c. If regulated, the monopoly will produce until the ...
A monopolistic diagram is examined.