A Profit-Maximizing Monopolist Faces a Downward-Sloping Demand Curve That Has

question 27

Multiple Choice

A profit-maximizing monopolist faces a downward-sloping demand curve that has a constant elasticity of -4.The firm finds it optimal to charge a price of $24 for its output.What is its marginal cost at this level of output?

• A)$55
• B)$18
• C)$48
• D)$10
• E)$24

---

Definitions:

Production Costs

The expenses directly associated with the manufacturing of goods or services, including materials, labor, and overhead.

Economies Of Scale

The cost advantage that arises with increased output of a product, where the average cost per unit decreases as the scale of production expands.

International Trade

The exchange of goods, services, and capital between countries, driven by comparative advantages and market needs.

Domestic Producers

Businesses or manufacturers that produce goods within their own country rather than importing them from abroad.