The Table Given Below Shows the Prices Charged and Marginal

question 8

Multiple Choice

The table given below shows the prices charged and marginal cost incurred by a monopolist for different units of the output. Table 10.3

- Assume that the firm described in Table 10.3 is incurring a total cost of $7,000 at the profit-maximizing output level.The firm will

• A)lose $10,000 in the short run.
• B)break even.
• C)earn a profit of $3,800.
• D)earn a profit of $3,500.
• E)earn a profit of $5,500.

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Definitions:

Materials Consumed

The direct raw materials used in the production process during a specific period.

Conversion Costs

Expenses incurred during the transformation of raw materials into finished products, including labor and overhead.

Equivalent Unit

A concept used in cost accounting to standardize units of production, facilitating the calculation of costs per unit in processes producing heterogeneous outputs.

Gallons

A unit of volume measurement in the U.S. customary units and the British imperial systems, primarily used to measure liquids.