The market demand for a monopoly firm is estimated to be:
where
is quantity demanded,P is price,M is income,and
is the price of a related good.The manager has forecasted the values of M and
will be $50,000 and $20,respectively,in 2016.The average variable cost function is estimated to be
Total fixed cost in 2016 is expected to be $4 million.The firm's profit is
A) $100,000.
B) $200,000.
C) $375,000.
D) -$182,000.
E) $800,000.
Correct Answer:
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