If marginal cost is increasing, average variable cost must also be increasing.

The local diner is usually jammed on Saturday mornings. Luke knows the owner and had him reserve a stool at the counter. Luke has

A) cooperated with the owner. B) competed with other customers. C) taken an efficient course of action, from his own perspective. D) engaged in all of the above.

The figure above shows the market for coffee. If the efficient quantity of coffee is produced, the producer surplus is

A) $10 million. B) $20 million. C) $60 million. D) zero.