Using Time-Series Data,the Demand Function for a Profit-Maximizing Monopolist Has

question 97

Multiple Choice

Using time-series data,the demand function for a profit-maximizing monopolist has been estimated as where is the amount sold,P is price,M is income,and is the price of a related good.The estimated values for M and in 2014 are $25,000 and $200,respectively.The short-run marginal cost curve for this firm has been estimated as: Total fixed cost is forecast to be $500,000 in 2016.What is the profit-maximizing or loss-minimizing) level of production?

• A)0 units,the firm should shut down.
• B)1,000 units
• C)1,800 units
• D)2,000 units
• E)8,000 units

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Definitions:

Quartile

A statistical term describing each of four equal groups into which a population can be divided based on a particular variable.

Annual Family Income

The total amount of money earned by all members of a family within one year.

Income Distribution

The way in which total income is shared amongst the members of a society, often analyzed to understand the extent of economic inequality.

Before-Tax Income

The total income earned by an individual or corporation before taxes have been deducted.