|Posted on April 17, 2014 at 9:30 AM|
If a monopoly is regulated to break even (AKA earn zero economic profit AKA normal profit), it will produce at a level of output where price (AKA demand) equals the average total cost curve (P=D=ATC).
This is known as the fair-return price. Even though there are no economic profits, accounting profits can be positive due to the presence of opportunity costs.
AP Microeconomics Unit 2 Product Markets