Suppose a monopolist faces the demand curve and cost curves shown below. FIGURE 10- 4
-Refer to Figure 10- 4. If this single- price monopolist is producing at the profit- maximizing level of output, the total revenue is represented by the area

Question

Suppose a monopolist faces the demand curve and cost curves shown below.  FIGURE 10- 4
-Refer to Figure 10- 4. If this single- price monopolist is producing at the profit- maximizing level of output, the total revenue is represented by the area

Quizplus · Accepted Answer

At the profit-maximizing level of output, the monopolist produces where MC = MR, which is at point Q0 in the graph. The price charged is P4, which corresponds to point a. The total revenue is represented by the rectangle 0P4aQ0, which is the product of price and quantity. Therefore, the correct answer is B.

Suppose a Monopolist Faces the Demand Curve and Cost Curves