If MC = Q/15 Represents Marginal Cost for a Monopolist

question 29

Multiple Choice

If MC = Q/15 represents marginal cost for a monopolist and market demand is given by Q_d = 500 - 10P, the monopolist maximizes profit by producing:

• A) 187.5 units of output.
• B) 250 units of output.
• C) 300 units of output.
• D) 500 units of output.

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Definitions:

Net Purchases

Net purchases refer to the total cost of purchases after adjusting for returns, allowances, and discounts over a specific period.

Cost Of Goods Available For Sale

The total cost of inventory available to be sold during a given period, including both beginning inventory and purchases made.

Purchase Returns

Goods returned by the buyer to the seller, usually because they are defective or not as per the order placed.

Freight In

A cost associated with transporting goods into a business, often included in the cost of goods sold because it directly relates to the cost of bringing inventory to the business.