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

question 77

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 manager should ________________ because_____________.

• A) shut down; P = $520 < TVC = $320
• B) shut down; P = $480 < AVC = $500
• C) operate; P = $560 > AVC = $320
• D) operate; P = 480 > AVC = $300

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Definitions:

Social Harmony

The state of peaceful coexistence and cooperation among individuals in a community, contributing to overall societal stability.

Planning

The process of defining goals, establishing strategies to achieve those goals, and developing plans to integrate and coordinate activities.

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The capacity to achieve a desired result with minimal waste of time, effort, or resources.

Human Relations Approach

A management theory focusing on the importance of social relationships, employee well-being, and motivation in the workplace.