1.
R-1 F24140
Refer to the above diagram for a pure monopolist. If the monopolist is unregulated, it will maximize profits by charging:
A.
a price above P3 and selling a quantity less than Q3.
B.
price P3 and producing output Q3.
C.
price P2 and producing output Q2.
D.
price P1 and producing output Q1.
2.
Refer to the above diagram for a pure monopolist. Suppose a regulatory commission is created to determine a legal price for the monopoly. If the commission seeks to provide the monopolist with a "fair return," it will set price at:
P1.
P3.
P2.
P4.
3.
Refer to the above diagram for a pure monopolist. If the regulatory commission seeks to achieve the most efficient allocation of resources to this line of production, it will set a price of:
4.
Refer to the above diagram for a pure monopolist. If the commission sets price to achieve the most efficient allocation of resources, it will have to:
tax the monopolist P3P1 per unit to prevent the monopolist from realizing an economic profit.
subsidize the monopolist or the monopolist will go bankrupt in the long run.
subsidize the monopolist P1P4 per unit to allow the monopolist to break even.
tax the monopolist P1P2 per unit to prevent the monopolist from realizing an economic profit.
