Use the following to answer questions:
Figure: Demand, Revenue, and Cost Curves
-(Figure: Demand, Revenue, and Cost Curves) Look at the figure Demand, Revenue, and Cost Curves. Figglenuts-R-Us is a monopolist in the figglenut market. If the government regulated the figglenut market by setting a price ceiling of $40, Figglenuts-R-Us might:
A) produce 60 figglenuts to maximize profit.
B) produce 120 figglenuts to maximize profit.
C) shut down in the long run.
D) increase the price to $60.

Question

Use the following to answer questions:
Figure: Demand, Revenue, and Cost Curves 
-(Figure: Demand, Revenue, and Cost Curves) Look at the figure Demand, Revenue, and Cost Curves. Figglenuts-R-Us is a monopolist in the figglenut market. If the government regulated the figglenut market by setting a price ceiling of $40, Figglenuts-R-Us might:
A) produce 60 figglenuts to maximize profit. 
B) produce 120 figglenuts to maximize profit. 
C) shut down in the long run. 
D) increase the price to $60.

Quizplus · Accepted Answer

If the government regulated the figglenut market by setting a price ceiling of $40, Figglenuts-R-Us would not be able to cover its costs and would shut down in the long run.

Use the Following to Answer Questions