Refer to the Graph Shown

question 183

Multiple Choice

Refer to the graph shown. If this monopolist produces 45 units of output per day, it will:

• A) be maximizing profit.
• B) charge a price that exceeds its marginal cost.
• C) be able to increase profit by producing less per day.
• D) be able to increase profit by producing more per day.

---

Definitions:

Tax Burden

Refers to the total amount of tax that individuals or businesses must pay, relative to their income or profit.

Binding Price Ceiling

A limit imposed by the government on how high a price can be charged for a good or service, which is set below the equilibrium price, causing a shortage.

Tax Revenue

Government income obtained from taxation.

Payroll Tax

Duties levied on employees or the companies that employ them, computed as a percentage of the remuneration the employees are given.