Always There Wireless Is Wireless Monopolist in a Rural Area

question 31

Multiple Choice

Always There Wireless is wireless monopolist in a rural area.There are 200 customers,each of whom has a monthly demand curve for wireless minutes of ,where P is the per-minute price in dollars.The marginal cost of providing the wireless service is $0.25 per minute.If Always There charges $0.50 per minute,what is the difference in total profit compared to when it charges the marginal cost?

• A) $1,250
• B) $5,000
• C) $626
• D) $6,874

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Definitions:

Variable Costs

Expenses that change in proportion to the activity of a business, such as materials and labor costs that vary with production volume.

Operating Income

Earnings from a company's core business operations, excluding expenses and revenues that are unrelated to the primary activities.

Unit Selling Price

The cost for one unit of a product when it is sold.

Unit Variable Costs

Costs that vary directly with the volume of production or sales, such as materials and labor, on a per-unit basis.