Scenario: Tobac Co

Multiple Choice

Scenario: Tobac Co. is a monopolist in cigarette market in Nicotiana Republic, where the U.S. dollar is used as the official currency. The firm faces the demand curve shown below. The firm has a constant marginal cost of $2.00 per pack and a fixed cost of $50 million.

-Refer to the scenario above.Tobac Co.is forced by the government to charge the fair-return price,the producer surplus would be ________.

A) more than $50 million
B) $50 million
C) $0
D) negative