Final answer:
The regulated zero-profit price for a monopolist would be set where the marginal cost equals the market demand price at a certain level of output, ensuring no economic profits for the monopolist but efficiency in resource allocation.
Step-by-step explanation:
If a monopolist is regulated to charge a zero-profit price, regulators will likely set this price at the point on the demand curve where marginal cost equals the price. This point ensures that the monopolist covers all its costs, including normal profits, but does not make any economic profits. For instance, the regulators might set a price where the marginal cost of the last unit produced is equal to the market demand price at that quantity of output, ensuring the efficient allocation of resources, similar to what would occur in a perfectly competitive market.
In the scenario given, if regulators require that the monopolist produce a quantity of output where marginal cost crosses the demand curve at an output of 8 and charge a price of 3.5, which is the marginal cost at that point, they are aiming for the efficient allocation of resources. This price of 3.5 would be the zero-profit price, as it's set equal to the marginal cost, ensuring that consumers benefit from a higher quantity and lower price than they would under monopoly pricing, while the monopolist covers all costs, including the opportunity cost of capital.