-The table above shows the demand and costs for a single-price monopolist. The firm will
A) maximize profit by producing 3 units.
B) maximize profit by producing 2 units.
C) operate on the inelastic portion of its demand curve.
D) operate on the unit elastic portion of its demand curve.

Question

-The table above shows the demand and costs for a single-price monopolist. The firm will
A) maximize profit by producing 3 units. 
B) maximize profit by producing 2 units. 
C) operate on the inelastic portion of its demand curve. 
D) operate on the unit elastic portion of its demand curve.

Quizplus · Accepted Answer

A single-price monopolist maximizes profit where marginal cost (MC) equals marginal revenue (MR). At 2 units, MR equals MC, thus maximizing profit.

-The Table Above Shows the Demand and Costs for a Single-Price