The Following Figure Shows the Average Cost [AC],marginal Cost [MC],and

question 16

Multiple Choice

The following figure shows the average cost [AC],marginal cost [MC],and demand [D] curves for a natural monopoly;Qi denotes quantity and Pi denotes price.
Figure 15-3
-In Figure 15-3,under marginal-cost pricing,the monopoly would earn:

• A)negative economic profit equal to P₃CBP₂.
• B)positive economic profit equal to P₂BQ₂O.
• C)negative economic profit equal to FBQ₂Q₁.
• D)positive economic profit equal to FCQ₂Q₁.

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Definitions:

Mail Float

The time between when a payment is mailed and when it is received and processed.

Warehousing

The process of storing goods in a large building until they are sold or distributed.

Source of Financing

The means through which funds are provided to businesses for operating capital or growth, including loans, investment, or earnings.

Float

Money tied up in the check-clearing process.