Figure 15-7
-Refer to Figure 15-7. To maximize its profit, a monopolist would choose which of the following outcomes?
A)Q = 30 and P = 30
B)Q = 30 and P = 60
C)Q = 45 and P = 45
D)Q = 60 and P = 30

Question

Figure 15-7 
-Refer to Figure 15-7. To maximize its profit, a monopolist would choose which of the following outcomes?
A)Q = 30 and P = 30 
B)Q = 30 and P = 60 
C)Q = 45 and P = 45 
D)Q = 60 and P = 30

Quizplus · Accepted Answer

To maximize profit, a monopolist sets output where marginal revenue equals marginal cost and then uses the demand curve to determine the price consumers are willing to pay for that quantity. Without seeing Figure 15-7, the correct choice typically involves a higher price than the competitive price, as monopolists restrict output to raise prices. Choice B suggests a higher price for a given quantity, aligning with monopolistic behavior to maximize profits.

Figure 15-7 -Refer to Figure 15-7. to Maximize Its Profit, a Monopolist