Use the Following Table to Answer the Question : Table

question 76

Multiple Choice

Use the following table to answer the question : Table 15-3: shows the average cost [AC],marginal cost [MC],and demand [D] curves for a natural monopoly;Qi denotes quantity and Pi denotes price.
-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:

Par Value

The face value of a bond or stock as stated by the issuer.

Paid-in Capital

Paid-in capital represents the funds raised by a company through the sale of stock to shareholders, above the par value of the shares.

Treasury Stock

Shares that were once issued and fully paid, but have been bought back by the issuing company and are held in the company’s treasury.

Treasury Stock

Shares of a company's own stock that it has reacquired from shareholders and holds in its own treasury.