Figure 11-7
-For the firm in Figure 11-7, an unregulated monopolist, output falls below the efficient level in the short run by how much?
A)50
B)75
C)35
D)100

Question

Figure 11-7 
-For the firm in Figure 11-7, an unregulated monopolist, output falls below the efficient level in the short run by how much?
A)50 
B)75 
C)35 
D)100

Quizplus · Accepted Answer

The efficient level of output is where marginal cost equals marginal revenue, which is at output level Qe. The monopolist is producing at Qm, where marginal revenue is greater than marginal cost. The distance between Qm and Qe is the output shortfall, which is 75 units.

Figure 11-7 -For the Firm in Figure 11-7, an Unregulated Monopolist, Output