In the graph below, the price of capital is $500 per unit. How many units of labor should a firm use in order to produce 30,000 units of output at the lowest possible cost?

Which of the following is true when regulators require a natural monopolist to set price equal to marginal cost?

a. This policy results in a less than socially optimal allocation of resources. b. The marginal cost of producing the last unit sold exceeds the consumers' marginal value for that last unit. c. The monopolist will face recurring losses unless a subsidy is provided. d. The monopolist will earn a normal profit. e. The monopolist will earn more than a fair return.

Which of the following does not characterize a perfectly competitive firm that has shut down in the short run?

a. total revenue equals zero b. variable costs equal zero c. the firm suffers a loss d. fixed cost is positive e. fixed cost is zero