In Figure 22.2, which area represents total variable cost to the tobacco company? 
A. BP*C
B. OACQ*
C. 0P*CQ*
D. 0BCQ*
Answer: D
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Refer to Labor Demand and Labor Supply. Suppose firms in the industry earn zero profit. The total rental payment made to the industry's capital is measured by
a. area A.
b. area B.
c. area A + B.
d. area B + C.
Recall the Application. If the decrease in price of illegal drugs is primarily due to a change in demand, the equilibrium quantity of drugs
A) will increase. B) will decrease. C) will not change. D) may or may not change.
The above figure shows the demand and cost curves facing a monopoly. If a $100 per unit tax is charged, the loss in welfare resulting from the tax is
A) $250. B) $312.50. C) $1,250. D) $1,562.50.
The fundamental cause of monopolies is barriers to entry
a. True b. False Indicate whether the statement is true or false