Figure 15-6

-Refer to Figure 15-6.In order to maximize profits,the monopolist should charge a price of
A) $9.
B) $12.
C) $20.
D) $23.

Question

Figure 15-6
 
-Refer to Figure 15-6.In order to maximize profits,the monopolist should charge a price of
A) $9. 
B) $12. 
C) $20. 
D) $23.

Quizplus · Accepted Answer

At the price of $20, the monopolist will produce a quantity of 4 units where marginal cost (MC) equals marginal revenue (MR). Since the demand curve is elastic, the monopolist is able to charge a higher price and still sell a substantial quantity, resulting in maximum profits at $20.

Figure 15-6 -Refer to Figure 15-6.In Order to Maximize Profits,the Monopolist Should