00:01
So here we're talking market structure, right? and the idea or the phrase that's crucial is to emulate a perfect competition market, right? i'm going to abbreviate perfectly competition market.
00:13
But this could mean a lot of things, right? there are many different ways in which you could emulate a perfectly competitive market.
00:20
So the first one, the one that is most logical, is you set price equal to marginal cost, like in competition, right? however, this point does not actually exist on the diagram, right? the intersection here would be at about looks like a price approximately 2 .4, and a quantity of approximately maybe 51.
00:46
This point simply doesn't exist.
00:48
So this is one way in which you could emulate competition that the question clearly does not do.
00:53
Another way that you could regulate a monopoly, and this is more maybe more common in the real world, is zero profit.
01:01
Because in competition, excess profit gets driven out by competition, right? so here you might say, well, zero profit requires price equal to average total cost...