The following graph gives cost and revenue data for a monopolist:

-Refer to the above graph to answer this question.If the monopolist is unregulated and wishes to maximize its total profit,what will be its price and output?
A)$0 and 80.
B)$10 and 70.
C)$10 and 140.
D)$40 and 80.
E)$45 and 70.

Question

The following graph gives cost and revenue data for a monopolist:
 
-Refer to the above graph to answer this question.If the monopolist is unregulated and wishes to maximize its total profit,what will be its price and output?
A)$0 and 80. 
B)$10 and 70. 
C)$10 and 140. 
D)$40 and 80. 
E)$45 and 70.

Quizplus · Accepted Answer

A monopolist maximizes profit where marginal cost (MC) equals marginal revenue (MR). The graph indicates that this occurs at a price of $45 and an output of 70 units.

The Following Graph Gives Cost and Revenue Data for a Monopolist