Refer to the figure below. How much would the monopolist be willing to pay to avoid regulation?

The values 250 and 500 lie on the horizontal quantity axis, and the values 25, 37.5, and 50 lie on the vertical price axis. A pair of straight lines labeled M R and D start from a value 30 on the vertical axis, and pass through the points (250, 25), and (250, 37.5) and (500, 25), respectively. A horizontal line M C equals A C intersects the curve at the points (250, 25) and (500, 25).

Multiple Choice

• $1,562.5
• $6,250
• $4,687.5
• $3,125