Table 10-2
$\begin{array}{|c|c|c|}
\hline \begin{array}{c}
\text { Quantity per } \
\text { Day (cases) }
\end{array} & \begin{array}{c}
\text { Price per } \
\text { Case }
\end{array} & \text { Total Cost } \
\hline 1 & \$ 16 & \$ 7.00 \
\hline 2 & 15 & 9.50 \
\hline 3 & 14 & 11.00 \
\hline 4 & 13 & 12.00 \
\hline 5 & 12 & 14.50 \
\hline 6 & 11 & 17.50 \
\hline 7 & 10 & 21.00 \
\hline 8 & 9 & 25.00 \
\hline 9 & 8 & 30.00 \
\hline 10 & 7 & 35.50 \
\hline
\end{array}$ The government of a small developing country has granted exclusive rights to Linden Enterprises for the production of plastic syringes. Table 10-2 shows the cost and demand data for this government-protected monopolist.
-Refer to Table 10-2.What is the amount of profit that the firm earns?
A) $34.50
B) $42
C) $47
D) $49

Question

Table 10-2
 $\begin{array}{|c|c|c|}
\hline \begin{array}{c}
\text { Quantity per } \
\text { Day (cases) }
\end{array} & \begin{array}{c}
\text { Price per } \
\text { Case }
\end{array} & \text { Total Cost } \
\hline 1 & \$ 16 & \$ 7.00 \
\hline 2 & 15 & 9.50 \
\hline 3 & 14 & 11.00 \
\hline 4 & 13 & 12.00 \
\hline 5 & 12 & 14.50 \
\hline 6 & 11 & 17.50 \
\hline 7 & 10 & 21.00 \
\hline 8 & 9 & 25.00 \
\hline 9 & 8 & 30.00 \
\hline 10 & 7 & 35.50 \
\hline
\end{array}$ The government of a small developing country has granted exclusive rights to Linden Enterprises for the production of plastic syringes. Table 10-2 shows the cost and demand data for this government-protected monopolist.
-Refer to Table 10-2.What is the amount of profit that the firm earns?
A) $34.50
B) $42
C) $47
D) $49

Quizplus · Accepted Answer

To find the profit, we need to subtract the total cost from the total revenue. To find the total revenue, we need to multiply the quantity per day by the price per case. We can see from the table that the maximum revenue is earned at a quantity of 4 cases per day, where the price is $13 per case. The total revenue at this price and quantity is 4 x 13 = $52. Now we can find the profit by subtracting the total cost of $3 from the revenue of $52, which gives us a profit of $49. Therefore, the answer is (D) $49.

The best choice for the firm would be to produce 4 cases per day at a price of $13 per case, as this gives the maximum revenue and therefore the maximum profit.

Table 10-2 The Government of a Small Developing Country Has Granted Exclusive