The Figure Given Below Represents a Monopoly Firm Producing Perfume

question 33

Multiple Choice

The figure given below represents a monopoly firm producing perfume with downward sloping demand and marginal revenue (MR) curves.The products of this firm are sold in the competitive market by a retailer.Among the horizontal lines in the figure:
A - represents the marginal cost of per unit perfume production
B - represents the marginal cost of an independent perfume retailer
C - represents the sum of A and B
D - represents the marginal cost of the perfume monopolist for retailing its own output
E - represents the sum of A and D.


-Refer to Figure.Determine the profit earned by the perfume monopolist if it chooses to retail its products?

• A)$3.2
• B)$1.5
• C)$3.5
• D)$2.2

---

Definitions:

Depreciation

The process of spreading the costs of long-lived assets such as buildings and equipment over the total number of accounting periods in which they are expected to be used.