Use the Following to Answer Question

question 251

Multiple Choice

Use the following to answer question:
-(Table: Demand and Total Cost) Use Table: Demand and Total Cost.Lenoia runs a natural monopoly firm producing electricity for a small mountain village.The table shows Lenoia's demand and total cost of producing electricity.To maximize profits,Lenoia should charge a price of:

• A)$350.
• B)$400.
• C)$450.
• D)$500.

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Definitions:

Cost

The amount of cash or cash equivalents paid or the fair value of other consideration given to acquire an asset at the time of its acquisition or construction.

Profit Recognition

The process of reporting income when it is earned and realized or realizable, following accounting principles.

Line-By-Line Method

An accounting technique used in consolidation, where the parent company combines each item of the subsidiary's financial statements with its own, item by item.

Fair Value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.