Figure 11-7
-The firm in Figure 11-7 is an unregulated monopolist; it will produce which of the following?
A)175 units at a price of 7
B)100 units at a price of 6
C)100 units at a price of 9
D)150 units at a price of about 7.5

Question

Figure 11-7 
-The firm in Figure 11-7 is an unregulated monopolist; it will produce which of the following?
A)175 units at a price of 7 
B)100 units at a price of 6 
C)100 units at a price of 9 
D)150 units at a price of about 7.5

Quizplus · Accepted Answer

An unregulated monopolist will produce at the quantity where marginal cost (MC) equals marginal revenue (MR) and will charge the maximum price consumers are willing to pay for that quantity, which can be found on the demand curve. Without seeing Figure 11-7, the correct answer typically involves producing where MC=MR and then using the demand curve to find the price, which often results in a higher price than marginal cost.

Figure 11-7 -The Firm in Figure 11-7 Is an Unregulated Monopolist; It