Refer to the Above Graph

question 2

Multiple Choice

Refer to the above graph.Consider a monopolist in short-run equilibrium.This monopolist:

• A) has total fixed costs equal to area BEFC.
• B) has total variable costs equal to area 0CFQ.
• C) earns economic profit equal to area ABED.
• D) will cease production since its economic profits are negative.

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Definitions:

Moratorium

A temporary halt or suspension of an activity or law, usually by government decree.

Earmarks

Provisions added to legislation that allocate specific funds for particular projects, usually at the behest of a legislator to benefit their own constituents or interests.

Term Limits

Restrictions on the number of terms or the length of time a person can hold a particular elected office.

Interest Groups

Organizations that seek to influence public policy in favor of their specific interests without seeking political office.