Exhibit 10-5
-Refer to Exhibit 10-5 for a profit-maximizing monopoly. If the average total cost for the monopoly producing 50 units equals $13, then it will

Question

Exhibit 10-5 
-Refer to Exhibit 10-5 for a profit-maximizing monopoly. If the average total cost for the monopoly producing 50 units equals $13, then it will

Quizplus · Accepted Answer

Given that the monopoly is producing 50 units at an average total cost of $13, the total cost of production is 50 units * $13/unit = $650. If the monopoly is profit-maximizing, it will set its price where marginal revenue equals marginal cost, which is at the quantity of 50 units. Assuming the price per unit at this quantity is higher than the average total cost (since it's a profit-maximizing condition and not given explicitly in the question, but implied by the options), and without the specific price per unit at 50 units, we can infer that the profit is not zero or a loss. The correct answer involves calculating the total revenue minus the total cost. Without the selling price per unit, we cannot directly calculate the total revenue and thus the exact profit. However, the question seems to imply that there is a specific profit figure to be determined, suggesting some information might be missing or implied. Given the options, the only logical choice related to making a profit (since breaking even and incurring a loss are the other options) is to assume a scenario where the total revenue significantly exceeds the total cost, leading to a profit scenario. The correct answer choice B implies a specific profit amount, which would require knowing the selling price per unit to calculate accurately.

Exhibit 10-5 -Refer to Exhibit 10-5 for a Profit-Maximizing Monopoly. If the Monopoly