Question

The government sets a price ceiling for a monopoly that is below the​ profit-maximizing price but above the level at which the​ monopolist's marginal cost curve intersects demand. at the​ firm's new​ profit-maximizing point, price is above average variable cost. as a result of the price​ ceiling, the monopolist will

Answer 1

As a result of the price​ ceiling, the monopolist will "produce more than the monopoly level of output ".

The monopolist's profit maximizing level of output is found by likening its marginal revenue with its marginal cost, which is a similar benefit maximizing condition that a splendidly focused firm uses to decide its equilibrium level of output.