A firm produces 400 units of output at a total cost of $1,000. If fixed costs are $200,
average fixed cost is $10.
average total cost is $4.
average variable cost is $2.
Dan is the only seller of widgets in town. The market for widgets is characterized by the following:
Demand:
P = 175 - Q
Marginal Revenue: MR = 175 - 20
Marginal Cost: MC = 25 - 30
What is the deadweight loss associated with this monopoly?
115
225
88.5
112.5
If a monopolistically competitive firm is selling at a price above marginal cost, it is experiencing negative economic profits.
Cannot be determined
Zero economic profits
Positive economic profits