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Figure: The Monopolist III
-(Figure: The Monopolist III) Look at the figure The Monopolist III. If this monopolist profit-maximizes, it will produce _____ units and charge a price equal to _____. Its producer surplus will be _____, its consumer surplus will be _____, and the deadweight loss is _____.
A) 50; $30; $1,200; $600; $100
B) 35; $65; $1,225; $612.50; $612.50
C) 100; $65; $1,500; $615.50; $1,000
D) 70; $35; $1,225; $615.50; $615.50

Question

Use the following to answer question:
Figure: The Monopolist III 
-(Figure: The Monopolist III) Look at the figure The Monopolist III. If this monopolist profit-maximizes, it will produce _____ units and charge a price equal to _____. Its producer surplus will be _____, its consumer surplus will be _____, and the deadweight loss is _____.
A) 50; $30; $1,200; $600; $100 
B) 35; $65; $1,225; $612.50; $612.50 
C) 100; $65; $1,500; $615.50; $1,000 
D) 70; $35; $1,225; $615.50; $615.50

Quizplus · Accepted Answer

The monopolist maximizes profit by producing where marginal cost equals marginal revenue, which is at 35 units. The corresponding price is $65. The producer surplus, consumer surplus, and deadweight loss are calculated based on the areas under the demand and marginal cost curves.

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