Final answer:
A pure monopolist sets production at the level where marginal revenue equals marginal costs and uses the demand curve to determine price, typically resulting in a lower quantity and higher price compared to perfect competition.
Step-by-step explanation:
The question asks whether it is true that a pure monopolist is producing an output such that ATC (Average Total Cost) minus 4. This is a bit unclear due to the ambiguity of the initial question. However, if the question is regarding how the costing and pricing work in a monopoly scenario, we can provide some clarity. A pure monopolist determines the profit-maximizing level of output where marginal revenue (MR) equals marginal costs (MC) and then uses the market demand curve to set the price. Compared to a perfectly competitive firm, a monopolist typically produces a lower quantity and charges a higher price. In cases of perfect price discrimination, a monopolist can extract the maximum willingness to pay from each consumer, effectively achieving no consumer surplus and earning the highest possible profits. Regulatory choices might influence the monopolist's production and pricing, as shown in the provided scenario from Figure 11.3.