Figure 15-4 shows the profit-maximizing output and price of monopolist.
-Refer to Figure 15.4.Given that the monopolist is producing the profit-maximizing level of output,what is the maximum amount of revenue that the monopolist can give up and still remain in business?

Question

Figure 15-4 shows the profit-maximizing output and price of monopolist.

-Refer to Figure 15.4.Given that the monopolist is producing the profit-maximizing level of output,what is the maximum amount of revenue that the monopolist can give up and still remain in business?

Quizplus · Accepted Answer

The monopolist is producing at the profit-maximizing level of output, which means that marginal revenue is equal to marginal cost. The maximum amount of revenue that the monopolist can give up and still remain in business is the area of the triangle BGF, which is the difference between total revenue and total variable cost.

Figure 15-4 Shows the Profit-Maximizing Output and Price of Monopolist