**Exhibit 9-4: A Monopoly**| Price | Quantity Demanded | Total Fixed Cost | Total Variable Cost ||-------|--------------------|------------------|---------------------|| $100 | 0 | $20 | $0 || 90 | 1 | $20 | 20 || 80 | 2 | $20 | 48 || 70 | 3 | $20 | 78 || 60 | 4 | $20 | 110 || 50 | 5 | $20 | 150 |Refer to Exhibit 9-4. At an output level of 3 units, the monopolist earns a total profit of about ______.- ○ $80.00- ○ $92.00- ○ $112.00- ○ $110.00**Explanation of the Table:**This table depicts a monopoly's pricing strategy and cost structure. The columns show:- **Price:** The selling price per unit.- **Quantity Demanded:** The number of units consumers are willing to buy at each price level.- **Total Fixed Cost:** A constant cost of $20, applicable regardless of the output level.- **Total Variable Cost:** Costs that vary with the level of output.To find the total profit at an output level of 3 units, calculate:- **Total Revenue:** Price × Quantity = $70 × 3 = $210- **Total Cost:** Total Fixed Cost + Total Variable Cost = $20 + $78 = $98- **Total Profit:** Total Revenue - Total Cost = $210 - $98 = $112Therefore, the correct answer is $112.00.

Total Revenue is the product of price and output. Total Cost is the sum of total fixed cost and…

Exhibit 9-4: A Monopoly Total Quantity Total Fixed Variable Price Demanded Cost Cost $100 $20 $0 90 1 $20 20 80 $20 48 70 $20 78 60 4. $20 110 50 5. $20 150 Refer to Exhibit 9-4. At an output level of 3 units, the monopolist earns a total profits of about O $80.00 O $92.00 $112.00 $110.00

Exhibit 9-4: A Monopoly Total Quantity Total Fixed Variable Price Demanded Cost Cost $100 $20 $0 90 1 $20 20 80 $20 48 70 $20 78 60 4. $20 110 50 5. $20 150 Refer to Exhibit 9-4. At an output level of 3 units, the monopolist earns a total profits of about O $80.00 O $92.00 $112.00 $110.00

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

**Exhibit 9-4: A Monopoly**

| Price | Quantity Demanded | Total Fixed Cost | Total Variable Cost |
|-------|--------------------|------------------|---------------------|
| $100 | 0 | $20 | $0 |
| 90 | 1 | $20 | 20 |
| 80 | 2 | $20 | 48 |
| 70 | 3 | $20 | 78 |
| 60 | 4 | $20 | 110 |
| 50 | 5 | $20 | 150 |

Refer to Exhibit 9-4. At an output level of 3 units, the monopolist earns a total profit of about ______.

- ○ $80.00
- ○ $92.00
- ○ $112.00
- ○ $110.00

**Explanation of the Table:**

This table depicts a monopoly's pricing strategy and cost structure. The columns show:

- **Price:** The selling price per unit.
- **Quantity Demanded:** The number of units consumers are willing to buy at each price level.
- **Total Fixed Cost:** A constant cost of $20, applicable regardless of the output level.
- **Total Variable Cost:** Costs that vary with the level of output.

To find the total profit at an output level of 3 units, calculate:

- **Total Revenue:** Price × Quantity = $70 × 3 = $210
- **Total Cost:** Total Fixed Cost + Total Variable Cost = $20 + $78 = $98
- **Total Profit:** Total Revenue - Total Cost = $210 - $98 = $112

Therefore, the correct answer is $112.00.

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