Refer to the Information Provided in Table 13 -Refer to Table 13

question 137

Multiple Choice

Refer to the information provided in Table 13.3 below to answer the question(s) that follow.
Table 13.3
$$\begin{array} { | c | c | } \hline \text { Price } ( \$ ) & \text { Quantity } \\\hline 4.00 & 100 \\\hline 3.50 & 200 \\\hline 3.00 & 300 \\\hline 2.50 & 400 \\\hline 2.00 & 500 \\\hline 1.50 & 600 \\\hline 1.00 & 700 \\\hline\end{array}$$
-Refer to Table 13.3. If a monopoly faces the demand schedule given in the table and has a constant marginal and average cost of $1 per unit of providing the product, what is the level of output that would maximize its profits?

• A) 200
• B) 400
• C) 500
• D) 600

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Definitions:

Perfectly Competitive

Refers to a market scenario where an unlimited number of buyers and sellers operate, and the single product offered is homogenous, making no single entity able to influence the market price.

Marginal Cost

The cost of producing one additional unit of a product or service, a crucial concept for optimizing production and pricing decisions.

Fixed Cost

Costs that do not vary with the level of output, remaining constant even if production is zero.

Variable Costs

Costs that change in proportion to the level of production or business activity, such as materials and labor directly involved in manufacturing.