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

question 104

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 value of average variable cost at the optimal level of output?

• A)$76
• B)$96
• C)$232
• D)$196
• E)$112

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Definitions:

Cash Effect

The impact of a business transaction on the cash and cash equivalents held by the company, reflecting how an event affects its liquidity.

Merchandise Inventory

Goods that a retailer, distributor, or manufacturer aims to sell to generate revenue, recorded as a current asset on the balance sheet.

Cash Paid

Cash Paid refers to the actual outflow of cash from a company to settle obligations, such as paying for expenses, acquisitions, or dividends.

Notes Payable

Written agreements where the borrower promises to pay back a specified sum of money plus interest to the lender at a future date.