Refer to the graph shown. If hamburger dinners are produced by a pure monopoly f

Q: Refer to the graph shown. If hamburger dinners are produced by a pure monopoly f

1. d. earn $200 economic profit per day (Explanation: Price exceeds ATC by $2 at profit maximizing output level of 100. So, total profit equals $2 * 100 = $200) 2. d. BFC. (Explanation: BFC represents the reduction of consumer surplus produced by the monopoly that is not transfered to monopoly)

ID: 1200765 • Letter: R

Question

Refer to the graph shown. If hamburger dinners are produced by a pure monopoly firm that maximizes profit, the monopoly firm will

a. earn $100 per day

b. just cover its opportunity cost

c. go out of business

d. earn $200 economic profit per day

Refer to the graph shown. If hamburger dinners are produced by a pure monopoly firm that maximizes profit, the social cost of monopoly will be represented by the area:

a. ABFG.

b. ABCG.

c. GFHJ.

d. BFC.

F $7 - $6 398 i_MC-ATC $4 $3 - MR $1 $0 50 100 150 200 Quantity per day

Explanation / Answer

1. d. earn $200 economic profit per day (Explanation: Price exceeds ATC by $2 at profit maximizing output level of 100. So, total profit equals $2 * 100 = $200)

2. d. BFC. (Explanation: BFC represents the reduction of consumer surplus produced by the monopoly that is not transfered to monopoly)

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Refer to the graph shown. If hamburger dinners are produced by a pure monopoly f

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Explanation / Answer

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