Exhibit 23-9 Refer to Exhibit 23-9. A single-price monopolist earns a total profit of __________ when it produces the profit maximizing level of output.

Question

Exhibit 23-9  Refer to Exhibit 23-9. A single-price monopolist earns a total profit of __________ when it produces the profit maximizing level of output.

Quizplus · Accepted Answer

To find the profit maximizing level of output for a single-price monopolist, we need to find where marginal revenue (MR) equals marginal cost (MC). From the graph, we can see that MR intersects MC at a quantity of 6. At this quantity, the monopolist can charge a price of $20 and produce at an average cost of $14, resulting in a profit of $(20-14) * 6 = $36. Since the monopolist has a fixed cost of $74, the total profit would be $110 (i.e. $36 + $74). Therefore, the answer is B.