Refer to the Table Shown, Which Shows the Demand Schedule

question 36

Multiple Choice

Refer to the table shown, which shows the demand schedule for a firm that has a monopoly on the sale of computers in the country of Oz. If the firm were to set the price of computers at $2,000: $\begin{array}{c}\begin{array}{|c|}\hline \text { Price of computers }(\$) \\\hline 5,000 \\\hline 4,000 \\\hline 3,000 \\\hline 2,000 \\\hline 1,000 \\\hline\end{array}\begin{array}{c|}\hline \text { Quantity demanded per year }\\\hline 100 \\\hline 200 \\\hline 300 \\\hline 400 \\\hline 500 \\\hline \end{array}\end{array}$

• A) it would maximize profits.
• B) marginal revenue would be negative.
• C) the demand for computers would be elastic.
• D) marginal revenue would be positive.

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Definitions:

Total Revenues

The total receipts from sales of goods or services provided by a company before any expenses are subtracted.

Market Consumer Surplus

The discrepancy between the amount customers are prepared to pay for a product or service and the amount they end up paying.

Producer Surplus

The difference between what producers are willing to sell a good for and the actual price they receive.

Production Costs

The total amount spent by a business to produce goods or services, including materials, labor, and overhead expenses.