Table 95 Table 95 Shows the Demand and Cost Data Facing a Monopolistically

question 341

Multiple Choice

Table 9.5
$$\begin{array} { | c | c | c | } \hline \text { Quantity } & \begin{array} { c } \text { Price } \\\text { (dollars) }\end{array} & \begin{array} { c } \text { Total Cost } \\\text { (dollars) }\end{array} \\\hline 1 & 18 & 14 \\\hline 2 & 16 & 20 \\\hline 3 & 14 & 26 \\\hline 4 & 12 & 32 \\\hline 5 & 10 & 38 \\\hline 6 & 8 & 44 \\\hline\end{array}$$ Table 9.5 shows the demand and cost data facing a monopolistically competitive producer of canvas bags.
-Refer to Table 9.5.At the profit-maximising or loss-minimising output level ________.

• A) the firm makes a profit of $12
• B) the firm incurs a loss equal to its fixed cost
• C) the firm makes a profit of $16
• D) the firm incurs a loss of $14

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Definitions:

Fixed Costs

Costs that do not change with the level of production or sales volume, such as rent or salaries.

Variable Costs

Costs that vary in direct proportion to changes in the level of production or sales volume.

Sales

Transactions involving the exchange of goods or services for money, contributing to a company's revenue.

Break-Even Point

The Break-Even Point is the level of production or sales at which total revenues equal total costs, resulting in no profit or loss for the business.