The Table Given Below Shows the Price Charged by a Firm

question 25

Multiple Choice

The table given below shows the price charged by a firm and the marginal cost incurred by it for the different levels of the output. Table 24.2
What is the profit-maximizing output level for the monopoly firm described in Table 24.2 if the firm is earning a positive economic profit?

• A)1 unit
• B)2 units
• C)3 units
• D)5 units
• E)6 units

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Definitions:

Firm's Assets

The economic resources or valuable items owned by a company that are expected to provide future benefits.

Call Option

A financial contract that gives the buyer the right, but not the obligation, to buy a stock, bond, commodity, or other asset at a specific price within a specific time period.

Strike Price

The agreed-upon rate at which the possessor of an option may acquire (if it's a call option) or dispose of (if it's a put option) the underlying financial instrument or commodity.

Option

A financial derivative that gives the holder the right, but not the obligation, to buy or sell an asset at a specified price within a specified time.