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The graph below shows demand curve and cost data for a firm operating as a monopolist. In addition, the green line shows average total costs (ATC).

Suppose that the government decided to regulate this monopolist by requiring the firm to produce at the point where the Marginal Cost curve intersects with the demand curve. What is the quantity under this marginal cost pricing?

 

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Suppose that the government decided to regulate this monopolist by requiring the firm to produce at the point where the Marginal Cost curve intersects with the demand curve. What is the price under this marginal cost pricing?

 

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Compared to the profit maximizing quantity for this monopolist, the marginal cost pricing quantity is

 

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Compared to the profit maximizing price for this monopolist, the marginal cost pricing price is

 

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