When the price is greater than the minimum point of the average total cost curve, firms earn economic profits.

a.False

b.True

(Figure: Third Degree Monopolist) The monopolist in the graph has market power; he can separate the market into different consumer groups based on their elasticities of demand, and he can prevent arbitrage. The monopolist has a marginal cost of $10. If he practices third-degree price discrimination, total producer surplus will be

a.$43,750.b.$56,250.c.$156,250.d.$100,000.