A Monopolist Produces the Equilibrium Output of 400 Units at a Price

question 7

Multiple Choice

A monopolist produces the equilibrium output of 400 units at a price of $40.Given that the monopolist's marginal cost is equal to $15 and average cost is equal to $23,what is the monopolist's profit?

• A)$6,800
• B)$800
• C)$1,600
• D)$4,000
• E)$1,000

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Definitions:

Pretax Return

The income generated from an investment before the deduction of any taxes.

Sales Revenues

The total income generated from the sale of goods and services by a company before any costs or expenses are deducted.

Cash Operating Expenses

Expenses incurred during the operational activities of a business that affect cash flow, such as paying salaries and purchasing materials.

Simple Rate Of Return

A financial ratio used to calculate the profit an investment will generate, expressed as a percentage of the initial cost.