The Following Figure Shows Revenue and Cost Curves of a Monopolist.Figure

question 33

Multiple Choice

The following figure shows revenue and cost curves of a monopolist.Figure 11.8
AR: Average revenue curve
MR: Marginal revenue curve
MC: Marginal cost curve
-According to Figure 11.8, the profit maximizing price of the monopolist is:

• A)0.
• B)P_4.
• C)P_3.
• D)P_2.
• E)P_1.

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Definitions:

Variable Costs

Variable costs are expenses that change in proportion to the activity or production level of a business.

Fixed Costs

Expenses that do not fluctuate with the level of goods or services produced by the business.

Net Income

The total earnings of a person or organization after subtracting all expenses and taxes.

Variable Costs

Costs that change in proportion to the level of activity or volume of production in a company.