A Monopolist Faces the Following Demand Curve

question 294

Multiple Choice

A monopolist faces the following demand curve:

The monopolist has total fixed costs of $40 and a constant marginal cost of $5.At the profit-maximizing level of output,the monopolist's average total cost is

• A) $9.00.
• B) $7.50.
• C) $6.74.
• D) $5.82.

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Definitions:

Competitive Advantage

A situation that places a business in a advantageous or dominant position relative to its rivals.

Superior Position

Achieving a higher ranking or status in a competitive environment, often through strategic advantages.

Product Preference

The inclination of consumers to favor certain products over others, often based on attributes or personal tastes.

Product Adopters

Individuals or entities that start using a new product or technology shortly after it has been launched.