Refer to the Accompanying Figure to Answer the Following Questions

question 26

Multiple Choice

Refer to the accompanying figure to answer the following questions.

-A profit-maximizing firm without any price regulations would make ________ in profits.

• A) $1,500
• B) -$720
• C) $720
• D) -$240
• E) $240

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Definitions:

Profit-Maximizing

The process of increasing financial gain to the highest possible level given the constraints of the market.

Economic Profit

The difference between a firm's total revenue and its opportunity costs, including both explicit and implicit costs.

Price Regulation

Government or regulatory authority control over the pricing of goods and services, often to prevent excessively high prices or monopolies.

Regulatory Agency

A governmental body responsible for exercising autonomous authority over some area of human activity in a regulatory or supervisory capacity.