If an Average Cost Pricing Rule Is Imposed on the Firm

question 5

Multiple Choice

If an average cost pricing rule is imposed on the firm in the figure above, the deadweight loss will be

• A) zero.
• B) $150.
• C) $50.
• D) $250.

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Definitions:

Simplify

To reduce a mathematical expression or problem to its simplest form, making it easier to understand or solve.

Numerical Coefficient

A number that multiplies a variable in an algebraic expression, representing the variable's rate of change.

Algebraic Expression

A mathematical phrase that can include numbers, variables, and operation symbols but does not contain an equality sign.

Simplify

To make something easier to understand or do by reducing its complexity.