The following table gives the cost and demand data for a monopolist:

-Refer to the above information to answer this question.Suppose that the monopolist is unregulated.What will be the level of maximum profit?
A)$0.
B)$3.
C)$12.
D)$15.
E)$60.

Question

The following table gives the cost and demand data for a monopolist:
 
-Refer to the above information to answer this question.Suppose that the monopolist is unregulated.What will be the level of maximum profit?
A)$0. 
B)$3. 
C)$12. 
D)$15. 
E)$60.

Quizplus · Accepted Answer

A monopolist maximizes profit where marginal revenue equals marginal cost. Without specific data, we can't calculate exact figures, but the concept of profit maximization in monopoly suggests that the firm will produce at a level where MR=MC, which typically results in positive profit, ruling out $0. The highest profit level listed that a monopolist might aim for, given typical cost structures and demand curves, would be a significant positive amount, making $12 a plausible choice for maximum profit in a general context.

The Following Table Gives the Cost and Demand Data for a Monopolist