The Following Figures Show the Demand and Cost Curves of a Perfectly

question 87

Multiple Choice

The following figures show the demand and cost curves of a perfectly competitive and a monopoly firm respectively. Figure 10.7 D: Average Revenue
AC: Average cost
MC: Marginal cost
MR: Marginal cost
Calculate the deadweight loss in Figure 10.6, if the perfectly competitive industry is monopolized after it had been producing an output of 10, 000 units?

• A)The area P₂ACP₁
• B)The area ABC
• C)The area P₂ABP₁
• D)The distance AB
• E)There is no deadweight loss

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Definitions:

Time Series

A series of data points, generally comprising consecutive observations taken across a period of time.

Forecast

A prediction about future events or trends, often based on historical data and analysis, used in planning and decision-making processes.

Moving Average

An analytical process in statistics where different segments of the entire data set are averaged to examine data points.

Week

A time period consisting of seven consecutive days.