Questions 38-39 are based on the following set-up:

Elizabeth is sick and tired of energy producers ripping off consumers. She knows three things: First, the energy producers with which she is familiar are making economic profits. Second, having paid careful attention in economics class, in a competitive market price should equal marginal cost. Third, the representative producer's demand and cost structures look like this:

Price Marginal Revenue Average Total Cost Marginal Cost Demand EFG H Quantity