The imposition of a ceiling on a monopolist's price will effect the company's ________.

profits only

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average revenue in the short-run only

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equilibrium output only

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equilibrium output and profits

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Solution

The correct option is C equilibrium output and profits
b"The imposition of a ceiling on a monopolist's price will effect the company's equilibrium output and profits. The ceiling price is the maximum price limit and is usually set below the equilibrium price for some essential commodities to save the life of lower income group from inflating prices in a monopoly market. Therefore, it affects the equilibrium output and profits of the firm in monopoly market. "

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