If a marginal cost pricing rule is imposed on the firm in the figure above, the total surplus will be
A) zero.
B) $800.
C) $400.
D) $200.

Name: If a marginal cost pricing rule is imposed on the firm in the figure above, the total surplus will be A) zero. B) $800. C) $400. D) $200.
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Question

Quizplus · Accepted Answer

A marginal cost pricing rule sets the price equal to the marginal cost, which maximizes total surplus by ensuring that the quantity produced is at the socially optimal level where demand equals marginal cost.

If a Marginal Cost Pricing Rule Is Imposed on the Firm