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 71

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 average variable cost function?

• A)AVC = 200 -0.012Q + 0.000002Q²
• B)AVC = 200 - 0.048Q + 0.000012Q²
• C)AVC = 200 - 0.048Q + 0.000036Q²
• D)AVC = 200 - 0.012Q + 0.000018Q²

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