At an Output of 1,000 Units,a Monopoly Firm's Average Revenue

question 63

Multiple Choice

At an output of 1,000 units,a monopoly firm's average revenue is $40,its marginal revenue is $30,its marginal cost is $30,its average variable cost is $35,and fixed costs are $5,000.Given this information,we can conclude that the monopolist:

• A)is earning zero economic profit.
• B)is earning an economic profit equal to $5,000.
• C)is making an economic loss and should shut down.
• D)should increase output to maximize profit.

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Definitions:

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