Use the Following Table to Answer the Question : Table

question 17

Multiple Choice

Use the following table to answer the question : Table 15-2: shows the marginal revenue curve [MR],the demand curve,and the marginal cost curve [MC] for a monopolist with constant costs.

-Refer to Figure 15-2.Since there is a positive deadweight loss from monopoly,which of the following statements must be true?

• A)The gain in producer surplus should not exceed $450.
• B)The loss in total surplus should be lesser than or equal to $300.
• C)The loss in consumer surplus should not exceed $600.
• D)The gain in total surplus should exceed the loss in consumer surplus.

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Definitions:

After-tax Cash Inflows

The amount of cash generated from any business activity after accounting for taxes.

Scrap Equipment

Old or discarded machinery and equipment that has no further use and is usually sold for its material content.

Discounted Payback Period

The time period required for the return on an investment to cover the cost, taking the time value of money into account.

Cash Inflows

Money or other forms of capital coming into a business, often from sales, investments, or financing activities.