Refer to the Graph Shown

question 53

Multiple Choice

Refer to the graph shown. If the monopoly firm maximizes profit, consumers will pay:

• A) $2.00 per unit and consumer surplus will be 45.
• B) $2.50 per unit and consumer surplus will be 18.75.
• C) $3.50 per unit and consumer surplus will be 11.25.
• D) $3.50 per unit and consumer surplus will be 22.5.

Understand the concept of investments in human capital and its importance for individual and organizational productivity.

Recognize the economic reasoning behind employer investments in employee education and the expected returns in terms of labor productivity.

Comprehend how changes in consumer demand impact the demand for resources needed to produce goods.

Grasp the principles underlying the derived demand curve for a resource and how it is affected by changes in the demand for final products.

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Definitions:

Economies of Scale

The cost advantage that arises with increased output of a product, resulting in a decrease in the per-unit cost as the scale of production is enlarged.

Long-run Total Costs

The aggregate sum of all production costs for a company when all input factors are variable, analyzed over a prolonged period.

Economies of Scale

The cost advantages that enterprises obtain due to size, output, or scale of operation, with cost per unit of output generally decreasing with increasing scale.

Average-total-cost Curve

A graphical representation that shows the average total cost of producing each quantity of output.