A Monopolist Is Maximizing Profit at an Output Rate of 1,000

question 66

Multiple Choice

A monopolist is maximizing profit at an output rate of 1,000 units per month. At this output rate, the price that its customers are willing and able to pay is $8 per unit, average total cost is $5 per unit, and marginal cost is $6 per unit. It may be concluded that at this monthly output rate, marginal revenue is

• A) $5 per unit, and the monopolist earns zero economic profits.
• B) $6 per unit, and the monopolist earns economic profits of $2,000 per month.
• C) $6 per unit, and the monopolist earns economic losses of $1,000 per month.
• D) $6 per unit, and the monopolist earns economic profits of $3,000 per month.

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Definitions:

\(15^{-x}\)

An expression representing the reciprocal of 15 raised to the power of x, used in mathematical and financial calculations.

Radioactive Elements

Elements that emit radiation as a result of the spontaneous disintegration of their atomic nuclei.

Half-Life

The time required for a quantity to reduce to half its initial value, often used in the context of radioactive decay.

\(24\left(\frac{1}{2}\right)^{\frac{t}{30}}\)

An exponential function representing the decay or growth of a quantity, where 24 is the initial value, \(\frac{1}{2}\) is the base of the exponent signifying decay, and \(\frac{t}{30}\) is the exponent indicating time or another variable at which the decay occurs.