The following table shows the quantity demanded of a good at various prices for a monopoly firm.
Table 11-1 $$\begin{array} { | c | c | }
\hline \text { Quantity } & \text { Price } \
\hline 1 & \$ 90 \
\hline 2 & \$ 80 \
\hline 3 & \$ 70 \
\hline 4 & \$ 60 \
\hline 5 & \$ 50 \
\hline 6 & \$ 40 \
\hline 7 & \$ 30 \
\hline 8 & \$ 20 \
\hline 9 & \$ 10 \
\hline
\end{array}$$
-Refer to Table 11-1.If the marginal cost of producing each unit is $30,what is the firm's profit-maximizing level of output?
A)3
B)4
C)5
D)7

Question

The following table shows the quantity demanded of a good at various prices for a monopoly firm.
Table 11-1 $$\begin{array} { | c | c | } 
\hline \text { Quantity } & \text { Price } \
\hline 1 & \$ 90 \
\hline 2 & \$ 80 \
\hline 3 & \$ 70 \
\hline 4 & \$ 60 \
\hline 5 & \$ 50 \
\hline 6 & \$ 40 \
\hline 7 & \$ 30 \
\hline 8 & \$ 20 \
\hline 9 & \$ 10 \
\hline
\end{array}$$
-Refer to Table 11-1.If the marginal cost of producing each unit is $30,what is the firm's profit-maximizing level of output?
A)3
B)4
C)5
D)7

Quizplus · Accepted Answer

The profit-maximizing level of output is where marginal revenue equals marginal cost. In this case, marginal cost is $30. Looking at the table, we can see that marginal revenue is equal to $30 when quantity is 4. Therefore, the profit-maximizing level of output is 4.

The Following Table Shows the Quantity Demanded of a Good