The Diagram Below Shows Cost and Revenue Curves for a Natural

question 53

Multiple Choice

The diagram below shows cost and revenue curves for a natural monopoly producing electricity. Price is dollars per kilowatt hour and quantity is kilowatt hours per day. FIGURE 12-7
-Refer to Figure 12-7. If this firm were unregulated and profit maximizing, its profit would beper day.

• A) $60 000
• B) $120 000
• C) $110 000
• D) $0
• E) $10 000

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Definitions:

Paid-In Capital

The total amount of money raised by a company through the sale of shares to the shareholders, including additional amounts over the nominal value.

Issue Price

The price at which new securities are sold to the public or investors by the issuer when they are first offered.

Par

The face value of a security as stated by its issuer, distinct from its market value.

Common Stock

A type of security that represents ownership in a corporation, with voting rights and potential for dividends.