Use the following to answer questions:
-(Table: Demand and Total Cost) Look at the table Demand and Total Cost. Lenoia runs a natural monopoly producing electricity for a small mountain village. The table shows Lenoia's demand and total cost of producing electricity. The profit-maximizing quantity of electricity for her to produce is _____ megawatts.
A) 2
B) 3
C) 4
D) 5

Question

Use the following to answer questions: 
-(Table: Demand and Total Cost) Look at the table Demand and Total Cost. Lenoia runs a natural monopoly producing electricity for a small mountain village. The table shows Lenoia's demand and total cost of producing electricity. The profit-maximizing quantity of electricity for her to produce is _____ megawatts.
A) 2 
B) 3 
C) 4 
D) 5

Quizplus · Accepted Answer

The profit-maximizing quantity for a monopoly is where marginal cost (MC) equals marginal revenue (MR). Without the table, we assume that at 4 megawatts, MR equals MC, making it the profit-maximizing output.

Use the Following to Answer Questions