Suppose the accompanying figure shows the demand curve, marginal revenue curve and marginal cost curve for a monopolist. This monopolist maximizes its profit by producing ________ textbooks per week and charging a price of ________ per textbook.
A)150; $20
B)100; $40
C)100; $80
D)150; $40

Question

Suppose the accompanying figure shows the demand curve, marginal revenue curve and marginal cost curve for a monopolist.  This monopolist maximizes its profit by producing ________ textbooks per week and charging a price of ________ per textbook.
A)150; $20 
B)100; $40 
C)100; $80 
D)150; $40

Quizplus · Accepted Answer

The monopolist chooses a quantity at which MC = MR, and charges the price that corresponds to that quantity on the demand curve.

Suppose the Accompanying Figure Shows the Demand Curve, Marginal Revenue