Exhibit 9-14
-The profit-maximizing (or loss-minimizing) price the monopoly will charge in Exhibit 9-14 is
A) irrelevant since the firm should shut down
B) $11
C) $16
D) $18
E) $22

Question

Exhibit 9-14 
-The profit-maximizing (or loss-minimizing) price the monopoly will charge in Exhibit 9-14 is
A) irrelevant since the firm should shut down 
B) $11 
C) $16 
D) $18 
E) $22

Quizplus · Accepted Answer

In Exhibit 9-14, the profit-maximizing (or loss-minimizing) price can be found where the marginal cost (MC) equals marginal revenue (MR). From the graph, we can see that the MC curve intersects the MR curve at a quantity of 6. The corresponding price on the demand curve is $16. Therefore, the monopoly will charge a price of $16 to maximize its profits (or minimize its losses) in the short run.

Exhibit 9-14 -The Profit-Maximizing (Or Loss-Minimizing) Price the Monopoly Will Charge in Will