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At an Output of 1,000 Units,a Monopoly Firm's Average Revenue

Question 63

Multiple Choice

At an output of 1,000 units,a monopoly firm's average revenue is $40,its marginal revenue is $30,its marginal cost is $30,its average variable cost is $35,and fixed costs are $5,000.Given this information,we can conclude that the monopolist:


A) is earning zero economic profit.
B) is earning an economic profit equal to $5,000.
C) is making an economic loss and should shut down.
D) should increase output to maximize profit.

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