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.

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Definitions:

Demographically Diverse

Reflecting a population that includes a wide range of characteristics such as age, sex, ethnicity, or socioeconomic status.

Competitors

Other businesses or entities that offer similar products or services within the same market and vie for the same customer base.

Loyalty Rates

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Benefits-sought

Specific advantages or improvements customers are looking for in a product or service, which influence their purchasing decisions.