Exhibit 9-4 What is the profit-maximizing or loss-minimizing output for the monopolist represented in Exhibit 9-4, assuming it does not price discriminate?

Question

Exhibit 9-4  What is the profit-maximizing or loss-minimizing output for the monopolist represented in Exhibit 9-4, assuming it does not price discriminate?

Quizplus · Accepted Answer

The profit maximization occurs at the output level where marginal revenue (MR) equals marginal cost (MC). Looking at Exhibit 9-4, we can see that the MR curve intersects the MC curve at point E, which corresponds to an output level of 3 units. So, the profit-maximizing output for the monopolist is 3 units.

Exhibit 9-4 What Is the Profit-Maximizing or Loss-Minimizing Output