Refer to the table shown, which shows the demand schedule for a firm that has a monopoly on the sale of computers in the country of Oz. If the monopolist is currently producing 400 computers per year and it seeks to maximize profit, it should: $$\begin{array} { | r | r | }
\hline { \begin{array} { c }
\text { Price df } \
\text { computers(\$) }
\end{array} } & \text { Quantity demanded per year } \
\hline 5,000 & 100 \
\hline 4,000 & 200 \
\hline 3,000 & 300 \
\hline 2,000 & 400 \
\hline 1,000 & 500 \
\hline
\end{array}$$

Question

Refer to the table shown, which shows the demand schedule for a firm that has a monopoly on the sale of computers in the country of Oz. If the monopolist is currently producing 400 computers per year and it seeks to maximize profit, it should: $$\begin{array} { | r | r | } 
\hline   { \begin{array} { c } 
\text { Price df } \
\text { computers(\$) }
\end{array} } & \text { Quantity demanded per year } \
\hline 5,000 & 100 \
\hline 4,000 & 200 \
\hline 3,000 & 300 \
\hline 2,000 & 400 \
\hline 1,000 & 500 \
\hline
\end{array}$$

Quizplus · Accepted Answer

To maximize profit, a monopolist should produce at the quantity where marginal revenue equals marginal cost. Without specific cost data, we can infer from the demand schedule that reducing output from 400 units would allow the monopolist to increase the price, potentially increasing revenue and profit if the cost savings from producing fewer units outweigh the revenue lost from selling fewer units. Producing more would lower the price and potentially revenue, given the downward-sloping demand curve.

Refer to the Table Shown, Which Shows the Demand Schedule