5. Suppose when a monopolist produces 82 units its average revenue is $10 per unit, its marginal revenue is $7 per unit, its marginal cost is $4 per unit, and its average total cost is $2 per unit. What can we conclude about this monopolist? a. The monopolist is currently maximizing profits, and its total profits are $375. b. The monopolist is currently maximizing profits, and its total profits are $300. с. The monopolist is not currently maximizing profits; it should produce more units and charge a lower price to maximize profits. d. The monopolist is not currently maximizing profits; it should produce fewer units and

Principles of Economics 2e
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Chapter9: Monopoly
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Problem 33P: Draw a monopolists demand curve, marginal revenue, and marginal cost curves. Identify the...
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5. Suppose when a monopolist produces 82 units its average revenue is $10 per unit, its marginal
revenue is $7 per unit, its marginal cost is $4 per unit, and its average total cost is $2 per unit.
What can we conclude about this monopolist?
The monopolist is currently maximizing profits, and its total profits are $375.
а.
b. The monopolist is currently maximizing profits, and its total profits are $300.
с.
The monopolist is not currently maximizing profits; it should produce more units and
charge a lower price to maximize profits.
d. The monopolist is not currently maximizing profits; it should produce fewer units and
charge a higher price to maximize profits.
Transcribed Image Text:5. Suppose when a monopolist produces 82 units its average revenue is $10 per unit, its marginal revenue is $7 per unit, its marginal cost is $4 per unit, and its average total cost is $2 per unit. What can we conclude about this monopolist? The monopolist is currently maximizing profits, and its total profits are $375. а. b. The monopolist is currently maximizing profits, and its total profits are $300. с. The monopolist is not currently maximizing profits; it should produce more units and charge a lower price to maximize profits. d. The monopolist is not currently maximizing profits; it should produce fewer units and charge a higher price to maximize profits.
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