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

question 138

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$ $\text { Demand Data }$
$\begin{array}{|c|c|c|c}\begin{array}{c}\text { Total } \\\text { Output }\end{array} & \begin{array}{c}\text { Total } \\\text { Cost }\end{array} & \begin{array}{c}\text { Quantity } \\\text { Demanded }\end{array} & \text { Price } \\\hline 0 & \$ 25 & 0 & \$ 60 \\\hline 1 & 40 & 1 & 55 \\\hline 2 & 45 & 2 & 50 \\\hline 3 & 55 & 3 & 45 \\\hline 4 & 70 & 4 & 40 \\\hline 5 & 90 & 5 & 35 \\\hline 6 & 115 & 6 & 30 \\\hline\end{array}$ What output and price levels will maximize the firm's profit in the short run?

• A) 3 units and $45
• B) 4 units and $40
• C) 5 units and $35
• D) 6 units and $30

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Definitions:

Innocent Party

An individual or entity not responsible or involved in the wrongdoing or legal dispute in question.

Damages

Compensation claimed by or awarded to a party for loss or injury suffered due to another's actions or negligence.

Proving Fraud

The process of establishing the intentional deception made by one party in order to gain an unfair advantage over another, which often involves legal proceedings.

Innocent Party

An individual or entity that is not at fault or involved in wrongdoing, especially in a legal context.