Suppose the accompanying figure shows the demand curve, marginal revenue curve and marginal cost curve for a monopolist. The socially optimal level of output is ________ units per day.
A)F
B)G
C)H

Question

Suppose the accompanying figure shows the demand curve, marginal revenue curve and marginal cost curve for a monopolist.  The socially optimal level of output is ________ units per day.
A)F 
B)G 
C)H

Quizplus · Accepted Answer

The socially optimal level of output occurs where the marginal benefit of an additional unit of output (which is given by the demand curve)equals its marginal cost.

Suppose the Accompanying Figure Shows the Demand Curve, Marginal Revenue