Using Time-Series Data,the Demand Function for a Profit-Maximizing Monopolist Has $Q _ { d } = 142,000 - 500 P + 6 M - 400 P _ { R }$

question 6

Multiple Choice

Using time-series data,the demand function for a profit-maximizing monopolist has been estimated as $Q _ { d } = 142,000 - 500 P + 6 M - 400 P _ { R }$ where $Q _ { d }$ is the amount sold,P is price,M is income,and $P _ { R }$ is the price of a related good.The estimated values for M and $P _ { R }$ in 2021are $25,000 and $200,respectively.The short-run marginal cost curve for this firm has been estimated as: $M C = 200 - 0.024 Q + 0.000006 Q ^ { 2 }$ Total fixed cost is forecast to be $500,000 in 2021.What is the optimal price?

• A)This is irrelevant since the firm will not produce in the short run.
• B)$200
• C)$250
• D)$408
• E)$520

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Definitions:

Aggressive Behavior

Actions intended to harm or intimidate others, which can be a response to a perceived threat or a means to assert dominance.

Passive Avoidance

A learning process in which an individual learns to refrain from certain behaviors to avoid a negative outcome.

Mild Punishing Stimuli

Stimuli that are not severely harmful or painful but are used to decrease the likelihood of a behavior recurring.

Strong Punishing Stimulus

A stimulus that significantly decreases the likelihood of a behavior recurring by causing discomfort or distress when the behavior is exhibited.