Question
Suppose when a monopolist produces 75 units its average revenue is $10 per unit, its marginal revenue is $5 per unit, its marginal cost is
Suppose when a monopolist produces 75 units its average revenue is $10 per unit, its marginal revenue is $5 per unit, its marginal cost is $6 per unit, and its average total cost is $5 per unit. What can we conclude about this monopolist?
A. The monopolist is not currently maximizing profits; it should produce more units and charge a lower price to maximize profits
B. The monopolist is not currently maximizing profits; it should produce fewer units and charge a higher price to maximize profits
C. The monopolist is currently maximizing profits and its total profits are $375
D. The monopolist is currently maximizing profits and its total profits are $300
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Economics for Managers
Authors: Paul G. Farnham
3rd edition
132773708, 978-0133561128, 133561127, 978-0132773706
