Exhibit 13-3 A monopolist
In Exhibit 13-3, if this industry is regulated and the regulatory commission wants revenue to just cover cost, the proper price and output combination to be set is:
A. price = $10; output = 25.
B. price = $8; output = 30.
C. price = $5; output = 40.
D. price = $4; output = 25.
Answer: C
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A. 25.7 percent. B. 12.4 percent. C. 6.4 percent. D. 19.3 percent.