The diagram shows the demand and cost curves of a monopolist who initially produces at his profit-maximising level of output.
f the monopolist were required by the government to adopt marginal cost pricing, what would be the effect on the price charged and the output produced?
1 )
price: increase / output: increase
2 )
price: increase / output: decrease
price: decrease / output: increase
4 )
price: decrease / output: decrease
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