question 59\nthe graph shows the costs and revenues of an unregulated monopoly. government regulators can…

question 59\nthe graph shows the costs and revenues of an unregulated monopoly. government regulators can bring allocative efficiency to this market by setting the socially optimal price where\na) average total cost equals marginal cost\nb) marginal revenue equals average total cost\nc) marginal revenue equals marginal cost\nd) demand equals average total cost\ne) demand equals marginal cost

question 59\nthe graph shows the costs and revenues of an unregulated monopoly. government regulators can bring allocative efficiency to this market by setting the socially optimal price where\na) average total cost equals marginal cost\nb) marginal revenue equals average total cost\nc) marginal revenue equals marginal cost\nd) demand equals average total cost\ne) demand equals marginal cost

Answer

Brief Explanations:

Allocative efficiency occurs when the value that consumers place on a good or service (represented by the demand curve) is equal to the opportunity cost of producing it (represented by the marginal - cost curve). In a monopoly, to achieve allocative efficiency, the government should set the price where the demand curve intersects the marginal - cost curve.

Answer:

E. demand equals marginal cost