Graph 15-6 This Graph Depicts the Demand, Marginal-Revenue and Marginal-Cost

question 142

Multiple Choice

Graph 15-6 This graph depicts the demand, marginal-revenue and marginal-cost curves of a profit-maximising monopolist.Use the graph to answer the following question(s) .
-Refer to Graph 15-6.What is the deadweight loss equal to when the monopolist does NOT price discriminate?

• A)ABC
• B)ADF
• C)CEF
• D)deadweight loss will equal zero

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Definitions:

Diminishing Marginal Returns

A principle stating that as more of a variable input is added to a fixed input, beyond some point, the additional output produced from the additional input will eventually start to decrease.

Marginal Cost Curve

A graphical representation showing how the cost of producing one additional unit of a good changes as production volume changes.

Average Variable Cost

The total variable costs of production divided by the number of units produced, measuring the cost per unit that varies with output level.

Marginal Costs

The increase in total cost that arises from an extra unit of production.