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:

Pancreatic Lipase

An enzyme that digests lipids.

Lipids

A group of naturally occurring molecules that include fats, waxes, and certain vitamins, essential for energy storage and cell membrane structure.

Vitamin A

A fat-soluble vitamin important for normal vision, immune function, and reproduction.

Bones

The hard, dense organs that form the framework of the human body, essential for movement, protection of internal organs, and storage of minerals.