Question

In: Economics

Exhibit 2 Quantity Sold Price (units) Total Cost $10 10 $80 9 20 100 8 30...

Exhibit 2 Quantity Sold Price (units) Total Cost $10 10 $80 9 20 100 8 30 130 7 40 170 6 50 230 5 60 300 4 70 380 A single-price monopolist is a monopolist that sells each unit of its output for the same price to all its customers. Refer to Exhibit 2. A single-price monopolist that seeks to maximize profits will sell __________ units and charge a per-unit price of __________. Group of answer choices

20; $9

40; $7

50; $6

10; $10

7; $40

Solutions

Expert Solution

Answer-B 40; $ 7

A single-price monopolist that seeks to maximize profits will sell 40 or 30 units and charge a per-unit price of $ 7 or $ 8.

But as per given group choices answer is 40 units and $ 7.

When the result of total revenue-total cost is maximum, the profit is maximized.

When 40 units will be sold at $ 7

Given Total cost= $ 170

Total revenue= Price*output sold =7*40=280

Profit=total revenue - total cost

Profit= 280-170= $ 110

Option A

If price=$9 and output=20

Given, total cost= 100

Total revenue= 9*20=180

Profit=180-100 =$ 80

Option C

If price=6 and output=50

Given, Total cost= 230

Profit= 300-230= $ 70

Option D

If price=10 and output= 10

Given, Total cost= 80

Profit= 100-80= $ 20

Option E

If price= 40 and output=7

Total revenue= 280

This quantity of output, price and cost are not mentioned in question. There is no information about cost, thus the profit cannot be determined.

Rahul Sunny answered 1 month ago

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