Refer to the Following:
the Market Demand for a Monopoly $Q _ { d } = 100,000 - 500 P + 2 M + 5000 P _ { R }$

question 49

Multiple Choice

Refer to the following:
The market demand for a monopoly firm is estimated to be:
$Q _ { d } = 100,000 - 500 P + 2 M + 5000 P _ { R }$
where
$Q _ { d }$ is quantity demanded, P is price, M is income, and
$P _ { R }$ is the price of a related good. The manager has forecasted the values of M and
$P _ { R }$ will be $50,000 and $20, respectively, in 2015.
The average variable cost function is estimated to be
$A V C = 520 - 0.03 Q + 0.000001 Q ^ { 2 }$
Total fixed cost in 2015 is expected to be $4 million.
-The profit-maximizing price for 2015 is

• A) $100.
• B) $260.
• C) $80.
• D) $520.
• E) $560.

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