Suppose the Table Below Describes the Relationship Between Price and Quantity

question 37

Multiple Choice

Suppose the table below describes the relationship between price and quantity demanded for a monopolist. $$\begin{array} { | c | c | } \hline \text { Quantity } & \text { Price } \\\hline 1 & \$ 10 \\\hline 2 & \$ 9 \\\hline 3 & \$ 8 \\\hline 4 & \$ 7 \\\hline 5 & \$ 6 \\\hline 6 & \$ 5 \\\hline 7 & \$ 4 \\\hline 8 & \$ 3 \\\hline\end{array}$$ If the marginal cost of producing each unit of output is $5, then this monopolist's profit-maximizing level of output is ______.

• A)5
• B)4
• C)3
• D)2

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Definitions:

Reasonable Time

A legally acceptable period of time that is fair and appropriate under the circumstances for performing a particular act or obligation.

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A significantly large sector of the economy with high demand for products or services, often leading to ample business opportunities.

Contracted Price

The specific amount agreed upon by parties for goods or services in a contract.