Consider the following AR and MR curves for a single-price monopolist.
FIGURE 10-2
-Refer to Figure 10-2.If marginal costs were positive and constant but less than A,the profit-maximizing output for this single-price monopolist would be

Question

Consider the following AR and MR curves for a single-price monopolist.
  FIGURE 10-2
-Refer to Figure 10-2.If marginal costs were positive and constant but less than A,the profit-maximizing output for this single-price monopolist would be

Quizplus · Accepted Answer

The profit-maximizing output for a single-price monopolist is where marginal revenue (MR) equals marginal cost (MC). In this case, since marginal cost is positive and constant but less than price A, the monopolist will choose a level of output where MR=MC and this occurs at output level Q2. Therefore, the answer is C, greater than zero, but less than Q2.

Consider the Following AR and MR Curves for a Single-Price