The Following Figure Shows the Marginal Cost [MC],average Cost [AC],marginal

question 5

Multiple Choice

The following figure shows the marginal cost [MC],average cost [AC],marginal revenue [MR],and demand curves for a profit-maximizing monopolist.
Refer to Figure 11-2.If the government wishes to regulate the monopoly firm by setting the price at OB in the market,the monopolist will:

• A)produce the efficient quantity of output.
• B)have to shut down to cut losses.
• C)continue to earn economic profits.
• D)earn a higher profit.

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Definitions:

Bushels

A unit of volume that is used in the United States for measuring agricultural commodities like grains and fruits.

Corn

Refers to a cereal plant that yields large kernels on a cob, also a staple food in various regions.

Troy Oz

A unit of measure for precious metals, equivalent to approximately 31.1035 grams, used in the commodities market.