Use the Following to Answer Questions

question 306

Multiple Choice

Use the following to answer questions:
-(Table: Lunch) Look at the figure Lunch. Joe makes and sells picnic lunches to people taking all-day rafting trips on the river. The marginal cost and average cost of each lunch are a constant $4. If Joe is a monopolist, what is producer surplus in the long run?

• A) $45
• B) $90
• C) $180
• D) $360

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Definitions:

Reasonable Value

The fair or market value of goods or services, assessed based on what a reasonable buyer would be willing to pay under similar circumstances.

Lacked Capacity

Refers to a situation where an individual does not have the legal ability to enter into a binding contract, often due to age, mental condition, or intoxication.

Mental Impairment

A condition that significantly affects one's cognitive functions, potentially impacting daily living and activities.

Ratify

To formally approve or confirm, often referring to the approval of agreements, treaties, or constitutional amendments.