**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 4 units, the monopolist earns a total profit of about _______.**- $112.00- $118.00- $110.00- $120.00**Explanation:**The table in Exhibit 9-4 represents the relationship between price, quantity demanded, and the costs associated with producing different quantities in a monopoly setting. - **Price**: The selling price per unit at different levels of quantity demanded.- **Quantity Demanded**: The number of units consumers are willing to buy at each price point.- **Total Fixed Cost**: A constant cost of $20, which does not change with the level of output.- **Total Variable Cost**: Costs that change with the level of production.To calculate the total profit at 4 units:1. Total Revenue = Price * Quantity Demanded = $60 * 4 = $240.2. Total Cost = Total Fixed Cost + Total Variable Cost = $20 + $110 = $130.3. Total Profit = Total Revenue - Total Cost = $240 - $130 = $110.Therefore, the monopolist earns a total profit of about $110.00 when the output level is 4 units.

Given: Q=4 units then, P=60 TFC=20 TVC=110

Total Quantity Total Fixed Variable Price Demanded Cost Cost $100 $20 $0 90 1 $20 20 80 2 $20 48 70 3 $20 78 60 4 $20 110 50 $20 150 Refer to Exhibit 9-4. At an output level of 4 units, the monopolist earns a total profits of about O $112.00 O $118.00 O $110.00 $120.00

Total Quantity Total Fixed Variable Price Demanded Cost Cost $100 $20 $0 90 1 $20 20 80 2 $20 48 70 3 $20 78 60 4 $20 110 50 $20 150 Refer to Exhibit 9-4. At an output level of 4 units, the monopolist earns a total profits of about O $112.00 O $118.00 O $110.00 $120.00

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Cost of Production

The entire idea of the cost of production or production cost is applied corresponding, or we can say that it is related to monetary cost. Money cost refers to any money expenditure which the firm or supplier, or producer undertakes in purchasing or hiring factor of production or factor services.

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 4 units, the monopolist earns a total profit of about _______.**

- $112.00
- $118.00
- $110.00
- $120.00

**Explanation:**

The table in Exhibit 9-4 represents the relationship between price, quantity demanded, and the costs associated with producing different quantities in a monopoly setting.

- **Price**: The selling price per unit at different levels of quantity demanded.
- **Quantity Demanded**: The number of units consumers are willing to buy at each price point.
- **Total Fixed Cost**: A constant cost of $20, which does not change with the level of output.
- **Total Variable Cost**: Costs that change with the level of production.

To calculate the total profit at 4 units:
1. Total Revenue = Price * Quantity Demanded = $60 * 4 = $240.
2. Total Cost = Total Fixed Cost + Total Variable Cost = $20 + $110 = $130.
3. Total Profit = Total Revenue - Total Cost = $240 - $130 = $110.

Therefore, the monopolist earns a total profit of about $110.00 when the output level is 4 units.

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