Scenario 15-1
A monopoly firm maximizes its profit by producing Q = 500 units of output. At that level of output, its marginal revenue is $40, its average revenue is $80, and its average total cost is $44.
-Refer to Scenario 15-1. At Q = 500, the firm's marginal cost is

Question

Quizplus · Accepted Answer

In a profit-maximizing condition for a monopoly, marginal cost (MC) equals marginal revenue (MR). Since the marginal revenue at Q = 500 is $40, the marginal cost must also be $40.

Scenario 15-1 A Monopoly Firm Maximizes Its Profit by Producing Q =