Scenario 15-2

A monopoly firm maximizes its profit by producing 500 units output (so Q = 500).At that level of output, its marginal revenue is $32, its average revenue is $42, and its average total cost is $36.
-Refer to Scenario 15-2.At Q = 500,what is the firm's total cost

Question

Scenario 15-2
​​
A monopoly firm maximizes its profit by producing 500 units output (so Q = 500).At that level of output, its marginal revenue is $32, its average revenue is $42, and its average total cost is $36.
-Refer to Scenario 15-2.At Q = 500,what is the firm's total cost

Quizplus · Accepted Answer

To find the total cost, we need to use the formula:
Total Cost = Average Total Cost x Quantity
Total Cost = $36 x 500
Total Cost = $18,000

Therefore, the answer is B. The firm's total cost is $18,000.

As the firm is maximizing its profit at the current level of output, it should continue to produce 500 units.

Scenario 15-2 ​​

Scenario 15-2