Involve a Profit-Maximizing Monopolist $Q _ { d } = 142,000 - 500 P + 6 M - 400 P _ { R }$

question 71

Multiple Choice

Involve a profit-maximizing monopolist. Using time-series data, the demand function for the monopolist has been estimated as
$Q _ { d } = 142,000 - 500 P + 6 M - 400 P _ { R }$
where
$Q _ { d }$ is the amount sold, P is price, M is income, and
$P _ { R }$ is the price of a related good. The estimated values for M and
$P _ { R }$ in 2012 are $25,000 and $200, respectively. The short-run marginal cost curve for this firm has been estimated as:
$M C = 200 - 0.024 Q + 0.000006 Q ^ { 2 }$
Total fixed cost is forecast to be $500,000 in 2015.
-The firm's forecasted profit (loss) in 2015 is a

• A) loss of $100,000.
• B) loss of $500,000.
• C) profit of $100,000.
• D) profit of $500,000.
• E) profit of $908,000.

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Definitions:

Distribution Density

Refers to the number of places or outlets a product is available to consumers within a specific area.

Intensive Distribution

A level of distribution density whereby a firm tries to place its products and services in as many outlets as possible.

Administered Vertical Marketing System

A coordinated marketing system among participants at different levels of the supply chain, managed by one dominant member without formal ownership.

Corporate Vertical Marketing System

A coordinated marketing strategy where a single company controls multiple levels of production, distribution, and sales within its supply chain.