Exhibit 9-6 What is the profit-maximizing price for the monopolist in Exhibit 9-6?
A)$14
B)$11
C)$10
D)$9
E)$8

Question

Exhibit 9-6  What is the profit-maximizing price for the monopolist in Exhibit 9-6?
A)$14 
B)$11 
C)$10 
D)$9 
E)$8

Quizplus · Accepted Answer

The monopolist will set the price where MR=MC to maximize profit. In Exhibit 9-6, the marginal revenue for selling 4 units is $36, and the marginal cost for producing 4 units is $36, so MR=MC at 4 units. Therefore, the profit-maximizing price is the price at which the monopolist can sell 4 units, which is $9 per unit.

Exhibit 9-6 What Is the Profit-Maximizing Price for the Monopolist