-The Monopoly Represented in Figure 10-26 Has Constant Marginal Cost

question 43

Multiple Choice

-The monopoly represented in Figure 10-26 has constant marginal cost and no fixed costs.If the firm is a perfect price discriminator,economic profit will equal

• A)the area PABP'
• B)the area PACP'
• C)the area TCQ**0
• D)the area TCP'
• E)zero

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Definitions:

Price

The amount of money required to purchase a good, service, or asset, typically determined by supply and demand.

Marginal Revenue

The additional income obtained from selling one more unit of a good or service.

Marginal Revenue

Additional financial gain from selling an extra unit of a good or service.

Marginal Cost

Incremental cost increase for manufacturing another unit of a product or service.