Total Output Price Marginal
Revenue
Average
Total Cost
Marginal
Cost
1 $100 $100 $100.00 $30
2 90 80 63.00 26
3 80 60 52.67 32
4 70 40 49.50 40
5 60 20 49.60 50
6 50 0 50.00 52
7 40 -20 52.29 66
8 30 -40 55.75 80
9 20 -60 60.67 100
10 10 -80 67.60 130
Refer to the data for a nondiscriminating monopolist.At its profit-maximizing output, this firm's total costs will be
A)$300.
B)$248.
C)$198.
D)$126.

Question

Quizplus · Accepted Answer

The profit-maximizing output for a monopolist is where marginal revenue equals marginal cost. Here, MR = MC at output level 3. At this output, the average total cost is $52.67, so total cost is 3 * $52.67 = $158.01, which is closest to option C ($198).