-Refer to the Diagram Above

Multiple Choice

-Refer to the diagram above.Assume that this is an essential service and that the regulator sets a price where price equals marginal cost.Then,the most likely outcome is that

A) the monopolist will make an even larger profit than when it was unregulated.
B) the government will impose a higher tax on the monopolist.
C) the monopolist will make a smaller profit than when it was unregulated.
D) consumer surplus will decrease.
E) new firms will enter the market.