Exhibit 9-5 Demand and cost data for a monopolist $\begin{array}{|c|c|c|c|c|c|}
\hline \text { Price } & \text { Quantity } & \text { TR } & \text { MR } & \text { TC } & \text { Profit } \
\hline \$ 10 & 1 & 10 & 10 & 4 & \
9 & 2 & & & 8 & \
8 & 3 & & & 12& \
7 & 4 & & & 16& \
6 & 5 & & &20 \
5 & 6 & & & 24& \
4 & 7 & & & 28 & \
3 & 8 & & & 32& \
2 & 9 & & & 36 & \
1 & 10 & & &40 & \
\hline
\end{array}$
-Refer to Exhibit 9-5. The demand schedule and cost schedule for a monopolist are provided. Which output level maximizes profit?
A) 2.
B) 6.
C) 4.
D) 5.
E) 7.

Question

Exhibit 9-5 Demand and cost data for a monopolist $\begin{array}{|c|c|c|c|c|c|}
\hline \text { Price } & \text { Quantity } & \text { TR } & \text { MR } & \text { TC } & \text { Profit } \
\hline \$ 10 & 1 & 10 & 10 & 4 &  \
9 & 2 & & & 8 & \
8 & 3 & & &  12& \
7 & 4 & & &  16& \
6 & 5 & & &20  \
5 & 6 & & &  24& \
4 & 7 & & & 28 & \
3 & 8 & & & 32& \
2 & 9 & & &  36 & \
1 & 10 & & &40 & \
\hline
\end{array}$
-Refer to Exhibit 9-5. The demand schedule and cost schedule for a monopolist are provided. Which output level maximizes profit?
A) 2.
B) 6.
C) 4.
D) 5.
E) 7.

Quizplus · Accepted Answer

To maximize profit, a monopolist produces where marginal revenue (MR) equals marginal cost (MC). Calculating MR and MC, the profit-maximizing output level is 4 units, where MR = MC.

Exhibit 9-5 Demand and Cost Data for a Monopolist -Refer to Exhibit 9-5