Using time-series data, the demand function for a profit-maximizing monopolist has been estimated as

Q_d = 142,000 500P + 6M 400P_R

where Q_d is the amount sold, P is price, M is income, and P_R is the price of a related good. The estimated values for M and P_R in 2021 are $25,000 and $200, respectively. The short-run marginal cost curve for this firm has been estimated as:

MC = 200 0.024Q + 0.000006Q²

Total fixed cost is forecast to be $500,000 in 2021. What is the profit-maximizing (or loss-minimizing) level of production?

Multiple Choice

• 0 units, the firm should shut down.
• 1,000 units
• 1,800 units
• 2,000 units
• 8,000 units