Suppose When a Monopolist Produces 50 Units Its Average Revenue

question 262

Multiple Choice

Suppose when a monopolist produces 50 units its average revenue is $8 per unit, its marginal revenue is $4 per unit, its marginal cost is $4 per unit, and its average total cost is $3 per unit. What can we conclude about this monopolist?

• A)The monopolist is currently maximizing profits, and its total profits are $200.
• B)The monopolist is currently maximizing profits, and its total profits are $250.
• C)The monopolist is not currently maximizing its profits; it should produce more units and charge a lower price to maximize profit.
• D)The monopolist is not currently maximizing its profits; it should produce fewer units and charger a higher price to maximize profit.

---

Definitions:

Behavior Modification Techniques

Methods used in behavior analysis and psychology to change someone's behavior through positive or negative reinforcement or punishment.

Superstitious Behavior

Persistent behavior that has a coincidental and not a functional relationship to the reinforcement received.

Functional Relation

A relationship between variables where changes in one variable correspond to changes in another, often used in scientific and mathematical contexts.

Accidentally Reinforced

A situation in behaviorism where behaviors are strengthened or repeated because of an unintended positive consequence or reward.