Exhibit 13-3 A monopolist
-In Exhibit 13-3, if this is an unregulated monopoly firm, the price and output which would maximize profits are:
A) price = $8; output = 25.
B) price = $8; output = 30.
C) price = $5; output = 40.
D) price = $4; output = 25.
E) price = $10; output = 25.

Question

Exhibit 13-3 A monopolist 
-In Exhibit 13-3, if this is an unregulated monopoly firm, the price and output which would maximize profits are:
A) price = $8; output = 25. 
B) price = $8; output = 30. 
C) price = $5; output = 40. 
D) price = $4; output = 25. 
E) price = $10; output = 25.

Quizplus · Accepted Answer

An unregulated monopoly maximizes profit where marginal cost (MC) equals marginal revenue (MR). The price is then set according to the demand curve at that output level.

Exhibit 13-3 a Monopolist