Exhibit 9-9 Assuming the Firm Should Not Shut Down

question 160

Multiple Choice

Exhibit 9-9 Assuming the firm should not shut down, the profit-maximizing price and quantity for the monopolist in Exhibit 9-9, which does not price discriminate, are

• A)P = $4 and Q = 7
• B)P = $3.50 and Q = 10
• C)P = $2 and Q = 7
• D)P = $1 and Q = 7
• E)P = $1 and Q = 10

---

Definitions:

ATC

Average Total Cost, which is the total cost divided by the number of goods produced, representing the per-unit production cost.

AVC

Average Variable Cost; the total variable cost divided by the quantity of output produced, indicative of variable costs per unit of output.

Marginal Cost Curve

This curve illustrates the change in the total cost that arises when the quantity produced is incremented by one unit. It is the graphical representation of the marginal cost of production as the amount produced changes.

ATC

Average Total Cost, which is the total cost of production (including both fixed and variable costs) divided by the number of units produced.