Involve a profit-maximizing monopolist. Using time-series data, the demand function for the monopolist has been estimated as
where
is the amount sold, P is price, M is income, and
is the price of a related good. The estimated values for M and
in 2012 are $25,000 and $200, respectively. The short-run marginal cost curve for this firm has been estimated as:
Total fixed cost is forecast to be $500,000 in 2015.
-What is the value of average variable cost at the optimal level of output?
A) $76
B) $96
C) $232
D) $196
E) $112
Correct Answer:
Verified
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