Figure 7.5
-Suppose that Figure 7.5 shows a monopolistʹs demand curve, marginal revenue, and its cost. The monopolist would maximize its profit by producing a quantity of _______ and by charging a price of _______.
A)35; $65
B)50; $50
C)70; $30
D)There is not sufficient information.

Question

Figure 7.5
-Suppose that Figure 7.5 shows a monopolistʹs demand curve, marginal revenue, and its cost. The monopolist would maximize its profit by producing a quantity of _______ and by charging a price of _______.
A)35; $65 
B)50; $50 
C)70; $30 
D)There is not sufficient information.

Quizplus · Accepted Answer

The monopolist would maximize its profit by producing a quantity of 35 and by charging a price of $65. This is because the monopolist's profit is maximized when the marginal revenue equals the marginal cost. In this case, the marginal revenue is $65 and the marginal cost is $30. Therefore, the monopolist would produce a quantity of 35 and charge a price of $65.

Figure 7.5 -Suppose That Figure 7.5 Shows a Monopolistʹs Demand Curve, Marginal