If a monopolist is producing the profit- maximizing output level and at this output level, the marginal cost is $4 and the profit- maximizing price is $9, what is the markup?

Name: If a monopolist is producing the profit- maximizing output level and at this output level, the marginal cost is $4 and the profit- maximizing price is $9, what is the markup?
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Question

Quizplus · Accepted Answer

Markup = (Price - Marginal Cost) / Marginal Cost = ($9 - $4) / $4 = 2.25

If a Monopolist Is Producing the Profit- Maximizing Output Level