Exhibit 24-7

-Refer to Exhibit 24-7.The maximum profits earned by a single-price monopolist producing good X are

Question

Exhibit 24-7
 
-Refer to Exhibit 24-7.The maximum profits earned by a single-price monopolist producing good X are

Quizplus · Accepted Answer

The monopolist will produce the quantity where MR=MC, which is 6 units of X. At this quantity, the price is $750 per unit and the monopolist earns a profit of ($750 - $250) x 6 = $3,000. However, we also need to account for the fixed costs of $750, so the maximum profits earned by the monopolist are $3,000 - $750 = $2,250. Therefore, the correct answer is C) $2,250.

Exhibit 24-7 -Refer to Exhibit 24-7.The Maximum Profits Earned by a Single-Price