The figure depicts the demand curve of a firm producing cars, together with its marginal cost, average cost, and isoprofit curves. Based on the figure, which of the following statements is correct? Price, MC ($) 8,000 5,400 4,100 2,820 100 0 0 I 34 1 I 50 Quantity of cars, Q MC Isoprofit AC 100 O The consumer surplus in the profit-maximizing outcome is $105,300. The producer surplus in the Pareto efficient outcome is $133,960. O The deadweight loss in the profit-maximizing outcome is $20,640. The firm's profit in the Pareto efficient outcome is $100,000.

The figure depicts the demand curve of a firm producing cars, together with its marginal cost, average cost, and isoprofit curves. Based on the figure, which of the following statements is correct? Price, MC ($) 8,000 5,400 4,100 2,820 100 0 0 I 34 1 I 50 Quantity of cars, Q MC Isoprofit AC 100 O The consumer surplus in the profit-maximizing outcome is $105,300. The producer surplus in the Pareto efficient outcome is $133,960. O The deadweight loss in the profit-maximizing outcome is $20,640. The firm's profit in the Pareto efficient outcome is $100,000.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter11: Price And Output Determination: Monopoly And Dominant Firms

Section: Chapter Questions

Problem 2E: Ajax Cleaning Products is a medium-sized firm operating in an industry dominated by one large...

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