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:

Function

The specific role or activity of an organ, structure, or substance in an organism or system.

Veliger Larval

A stage in the development of some mollusks, characterized by the presence of a ciliated swimming organ and the beginnings of the foot, shell, and mantle.

Unique

Having a distinct characteristic, quality, or identity that makes something strictly one of a kind.

Pedipalps

Paired appendages near the mouth of arachnids (such as spiders and scorpions) used for sensing, feeding, or reproduction.