Figure: Demand and Marginal Revenue (Figure: Demand and Marginal

question 77

Multiple Choice

Figure: Demand and Marginal Revenue (Figure: Demand and Marginal Revenue) The figure Demand and Marginal Revenue refers to a software upgrade.The producer incurred fixed costs of $10 million to produce the upgrade; the marginal cost of allowing consumers to download the upgrade is zero.What is the deadweight loss associated with the profit-maximizing price and quantity of the upgrade?

• A)$0
• B)$1.25 million
• C)$3.125 million
• D)$6.25 million

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Definitions:

Unilateral Contract

A contract formed by an offer or a promise on one side for an act to be done on the other, and a doing of the act by the other by way of acceptance of the offer or promise; that is, a contract wherein the only acceptance of the offer that is necessary is the performance of the act.

Enforceable

Capable of being imposed or executed legally or by authority.

Legally Enforceable

Refers to a right or obligation that can be upheld and compelled by law, typically through the court system.

Restatement (Second)

A collection of model laws aimed at clarifying, modernizing, and otherwise improving American common law on various subjects.