Use the following to answer question:
Figure: Monopoly Model
-(Figure: Monopoly Model)Use Figure: Monopoly Model.The profit-maximizing price is:
A)Z.
B)P.
C)S.
D)I.

Question

Use the following to answer question:
Figure: Monopoly Model 
-(Figure: Monopoly Model)Use Figure: Monopoly Model.The profit-maximizing price is:
A)Z. 
B)P. 
C)S. 
D)I.

Quizplus · Accepted Answer

In a monopoly model, the profit-maximizing price is determined where the marginal cost (MC) curve intersects the marginal revenue (MR) curve. This point determines the quantity of output the monopolist will produce. From this quantity, you then go up to the demand curve to find the price consumers are willing to pay for that quantity. The price that corresponds to this quantity on the demand curve is the profit-maximizing price, which is labeled as P in the provided choices.

Use the Following to Answer Question