Exhibit 9-14
-At the profit-maximizing (or loss-minimizing) level of production, the monopoly in Exhibit 9-14 will have total cost of
A) $264
B) $306
C) $216
D) $187
E) $176

Question

Exhibit 9-14 
-At the profit-maximizing (or loss-minimizing) level of production, the monopoly in Exhibit 9-14 will have total cost of
A) $264 
B) $306 
C) $216 
D) $187 
E) $176

Quizplus · Accepted Answer

The profit-maximizing level of production occurs where MR=MC. In Exhibit 9-14, we can see that MR is $48 at a quantity of 6 units (where the slope of the MR curve is equal to the slope of the MC curve). At this level of production, the total cost is $306 (as shown by the intersection of the quantity of 6 on the x-axis with the TC curve). Therefore, the correct answer is B.

Exhibit 9-14 -At the Profit-Maximizing (Or Loss-Minimizing) Level of Production, the Monopoly