The
following figure depicts a firm’s profit-maximising choice at point E, given the market demand curve and the
firm’s marginal cost curve.

The firm’s marginal costs are $400, $2960 and $4200 at output
levels Q = 0, Q* = 32 (point E)
and Q 0 = 48 (point F), respectively. Based on this
information, which of the following is correct? Hint: Use formulae for areas of rectangles and triangles! (the area of a triangle is height*base/2) You will not be able to answer this question without first doing some careful calculations!
For those of you who like to be precise, you can ignore the complication that cars can only be sold in discrete units!

Question

The
following figure depicts a firm’s profit-maximising choice at point  E, given the market demand curve and the
firm’s marginal cost curve.  
 
 The firm’s marginal costs are $400, $2960 and $4200 at output
levels Q = 0, Q* = 32 (point E)
and Q 0  = 48 (point F), respectively. Based on this
information, which of the following is correct? Hint: Use formulae for areas of rectangles and triangles! (the area of a triangle is height*base/2) You will not be able to answer this question without first doing some careful calculations! 
 For those of you who like to be precise, you can ignore the complication that cars can only be sold in discrete units!

Answer

The
producer surplus is $120,320

Answer

The
deadweight loss is $15,640.

Answer

The
consumer surplus is $8,000-5,440=2,560

Answer

The
gains from trade are $120,320.

Crowdly

The following figure depicts a firm’s profit-maximising choice at point E, give...

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