Which of the following correctly summarizes the outcome of setting the price as suggested by Ms. Smith and Mr. Brown?

Government officials Show more The graph below shows the cost and revenue curves of an unregulated monopolist Government officials want to regulate the monopoly price and they are currently debating what the regulated price should be. Ms. Smith argues that the price should be P2 while Mr. Brown argues that the price should be P1. Which of the following correctly summarizes the outcome of setting the price as suggested by Ms. Smith and Mr. Brown? Ms. Smith Mr. Brown A. Productive efficiency Allocative efficiency B. Fair return Production efficiency C. Productive efficiency Fair return D. Allocative efficiency Fair return E. Allocative efficiency Productive efficiency Fair return Show less

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