A monopolist produces the equilibrium output of 350 units at a price of $50.Given that the monopolist's marginal cost is equal to $15 and the monopolist earns a profit of $5,500,what is the monopolist's approximate average cost?
A)$66
B)$34
C)$70
D)$16
E)$23

Question

Quizplus · Accepted Answer

The monopolist's profit is calculated as (Price - Average Cost) * Quantity. Given the profit is $5,500, price is $50, and quantity is 350, we can set up the equation: ($50 - Average Cost) * 350 = $5,500. Solving for Average Cost gives approximately $34.

A Monopolist Produces the Equilibrium Output of 350 Units at a Price