Quantity per -Day (cases) Price per Case Total Cost $16 15 14 13 12 $7.00 2 3 4
ID: 1119363 • Letter: Q
Question
Quantity per -Day (cases) Price per Case Total Cost $16 15 14 13 12 $7.00 2 3 4 5 6 9.50 11.00 12.00 14.50 17.50 21.00 25.00 30.00 35.50 8 9 10 10 9 8 7 The government of a small developing country has granted exclusive rights to Linden Enterprises for the production of plastic syringes. Table 1 shows the cost and demand this government-protected monopolist. 35. Refer to Table 1. What is the profit -maximizing quantity and price for the me A) Quantity = 8 cases. Price-$9 B) Quantity = 7 cases, Price = $10 C) Quantity = 9 cases, Price-38 D) Quantity- 10 cases, Price $7 36. Refer to Table 1. What is the amount of profit that the firm earns? A) S34.50 B) $42 C) S47 D) $49Explanation / Answer
Correct answer for question number 35 is option B. Note that the marginal cost for the 7th unit is 3.5 while the marginal revenue is 4. 48 unit the marginal cost is 4 and the marginal revenue is 2. So marginal revenue and marginal cost are equal how close to each other when Q is 7 and so price is 10.
Answer to question number 36 is option D. Say that the total cost is $21 and total revenue is $70. This gives the profit amounting to $49.