When the Government Regulates the Price in a Monopoly Market

Multiple Choice

When the government regulates the price in a monopoly market by setting price at the level where demand equals marginal cost:

A) the monopolist reduces output resulting in a shortage in the market.
B) the monopolist's marginal revenue curve becomes horizontal over all levels of output.
C) the monopolist's profits are positive at the new price.
D) the monopolist produces output at the efficient level.