If the Marginal Cost Curve of All Identical Firms in a Perfectly

question 92

Multiple Choice

If the marginal cost curve of all identical firms in a perfectly competitive industry are horizontal at the same per-unit cost, then the market's consumer surplus equals the area

• A) beneath the demand curve and above the marginal cost curve.
• B) above the demand curve and beneath the marginal cost curve.
• C) below the marginal cost curve.
• D) above the demand curve.

---

Definitions:

Treasury Stock

Shares that were once a part of outstanding stock but were bought back by the issuing company, reducing the amount of outstanding stock on the open market.

Implied

Suggested or inferred from actions or statements, rather than being explicitly stated.

Federal Regulations

Laws and rules imposed by federal government agencies to regulate various activities and industries across the country.

Corporation

A legal entity separate from its owners, with its own rights and liabilities, allowing it to own assets, incur debts, and enter into contracts.