Using time-series data, the demand function for a profit-maximizing monopolist has been estimated asQd = 142,000 - 500P + 6M - 400PRwhere Qd is the amount sold, P is price, M is income, and PR is the price of a related good. The estimated values for M and PR in 2014 are $25,000 and $200, respectively. The short-run marginal cost curve for this firm has been estimated as:MC = 200 - 0.024Q + 0.000006Q2Total fixed cost is forecast to be $500,000 in 2016. The firm's forecasted profit (loss) in 2016 is
A. a loss of $500,000.
B. a profit of $908,000.
C. a loss of $100,000.
D. a profit of $100,000.
E. a profit of $500,000.
Answer: B
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If portable disk players made in China are imported into the United States, the Chinese manufacturer is paid with
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Refer to Figure 4.1. A shift from S1 to S2 will result from all of the following except
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For the monopsonist, marginal expenditure is greater than the wage rate because the monopsonist
A) pays a wage higher than that paid in a competitive market. B) chooses the perfectly competitive quantity of labor. C) must increase the wage to all units of labor to attract more units of labor. D) must take the wage as given by the market.