-For the unregulated, single-price monopoly shown in the figure above, when its profit is maximized, output will be
A) 4 units per year and the price will be $6.
B) 4 units per year and the price will be $4.
C) 6 units per year and the price will be $4.
D) None of the above answers is correct.

Question

-For the unregulated, single-price monopoly shown in the figure above, when its profit is maximized, output will be
A) 4 units per year and the price will be $6. 
B) 4 units per year and the price will be $4. 
C) 6 units per year and the price will be $4. 
D) None of the above answers is correct.

Quizplus · Accepted Answer

When a single-price monopoly maximizes profit, it will produce the quantity where marginal cost equals marginal revenue. In the figure, this occurs at an output of 4 units per year. The price will then be set at the point on the demand curve corresponding to that output, which is $6.

-For the Unregulated, Single-Price Monopoly Shown in the Figure Above