Assume That the Short-Run Cost and Demand Data Given in the Tables

question 89

Multiple Choice

Assume that the short-run cost and demand data given in the tables below confront a monopolistic competitor selling a given product and engaged in a given amount of product promotion. $\quad$$\quad$$\quad$$\quad$ $\text { Cost Data }$ $\quad$$\quad$$\quad$ $\text { Demand Data }$
$\begin{array}{|c|c|c|c}\begin{array}{c}\text { Total } \\\text { Output }\end{array} & \begin{array}{c}\text { Total } \\\text { Cost }\end{array} & \begin{array}{c}\text { Quantity } \\\text { Demanded }\end{array} & \text { Price } \\\hline 0 & \$ 25 & 0 & \$ 60 \\\hline 1 & 40 & 1 & 55 \\\hline 2 & 45 & 2 & 50 \\\hline 3 & 55 & 3 & 45 \\\hline 4 & 70 & 4 & 40 \\\hline 5 & 90 & 5 & 35 \\\hline 6 & 115 & 6 & 30 \\\hline\end{array}$ If the firm sells 3 units of output, marginal revenue will be

• A) -$5.
• B) $35.
• C) $135.
• D) $165.

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Definitions:

Long Lead Times

Extended periods required to manufacture a product or complete a process, often causing delays in production or output.

Long Setup Times

Extended periods required to prepare equipment or processes for a new production run, often causing inefficiencies.

Large Batch Sizes

Large Batch Sizes refer to the production strategy of manufacturing goods in large quantities at once to maximize efficiency and reduce costs per unit.

Large Inventories

Holding significant quantities of product or materials on hand, which can impact a company's financial statements and operational efficiency.