Table 14-16 A Monopolist Faces the Following Demand Curve

question 231

Multiple Choice

Table 14-16
A monopolist faces the following demand curve:

-Refer to Table 14-16.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:

Materials Quantity Variance

The discrepancy between what was actually used in terms of material for production and what was anticipated, times the standard cost for each unit.

Direct Material

Primary materials used in the making of a product that can be directly traced to the finished good.

Materials Price Variance

The difference between the actual cost of materials purchased and the expected (standard) cost, multiplied by the quantity of materials.

Labor Efficiency Variance

A measure used to assess the difference between the actual hours worked and the standard hours allotted to complete a task, multiplied by the standard hourly labor rate.