Answer the Question on the Basis of the Following Demand

question 40

Multiple Choice

Answer the question on the basis of the following demand and cost data for a pure monopolist: $\begin{array}{l}\begin{array}{ccc}&\text { Demand Data }&\\&&\text { Quantity }\\\text { Price } & & \text { Demanded } \\\hline\$ 5.50 & & 3 \\5.00 & & 4 \\4.50 & & 5 \\3.85 & & 6 \\3.35 & & 7 \\2.90 & & 8 \\2.50 & & 9\end{array}\begin{array}{ccc}&\text { Cost Data }&\\\\\text { Output } & & \text { Total Cost } \\\hline3& & \$ 5.00 \\4&&6.00\\5 & & 6.00 \\6 & & 7.50 \\7 & & 9.00 \\8 & & 11.00 \\9 & & 14.00\end{array}\end{array}$ Refer to the data.The profit-maximizing monopolist will realize a:

• A) profit of $8.50.
• B) profit of $7.50.
• C) profit of $16.
• D) loss of $14.

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Definitions:

Discrete Random Variable

A variable that can take on a countable number of possible values, often representing counts or categories.

Expected Value

The long-run average or mean value of random variables, indicating the anticipated outcome of an experiment if it were repeated many times.

Discrete Random Variable

A variable that assumes a finite number of unique values, typically signifying the results of a stochastic process.

Continuous Random Variable

A type of random variable that can take an infinite number of possible values within a given range, often associated with measurements.