The Following Figure Shows the Downward Sloping Demand and Marginal

question 38

Multiple Choice

The following figure shows the downward sloping demand and marginal revenue [MR] curves and the upward sloping marginal cost [MC] curve of a monopolist.
Figure 12-2
-Refer to Figure 12-2.Compared to perfect competition,monopoly pricing introduces efficiency loss equal to the area:

• A)VWE.
• B)ZVN.
• C)HEF.
• D)JHFK.

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Definitions:

Average Fixed Cost

The fixed cost divided by the quantity of output, representing the fixed cost per unit of output.

Total Fixed Costs

The sum of all costs that remain constant regardless of the level of production or output in a business.

Variable Costs

Costs that change in proportion to the good or service that a business produces.

Fixed Costs

Expenses that do not change with the amount of goods or services produced by a business.