A Profit-Maximizing Monopolist Charges a Price of $12

question 560

Multiple Choice

A profit-maximizing monopolist charges a price of $12. The intersection of the marginal revenue and marginal cost curves occurs where output is 10 units and marginal cost is $6. Average total cost for 10 units of output is $5. What is the monopolist's profit?

• A)$60
• B)$70
• C)$100
• D)$120

---

Definitions:

Ending Retained Earnings

The portion of net income left after dividends have been distributed to shareholders, reflected at the end of an accounting period.

Work Sheet

A work sheet is an informal business document used for preparing financial statements and facilitating the end-of-period accounting process, often in an Excel spreadsheet or similar format.

Adjusting Entries

These are journal entries made in an accounting system to update account balances prior to preparing financial statements, ensuring that all revenues and expenses are recorded in the appropriate periods.

Work Sheet

An informal financial statement usually used internally to prepare financial statements and support accounting operations.