Figure 11-7

For the firm in Figure 11-7, an unregulated monopolist, profit-maximizing output is below the long-run competitive level by how much?
A)100
B)75
C)50
D)25

Question

Figure 11-7

For the firm in Figure 11-7, an unregulated monopolist, profit-maximizing output is below the long-run competitive level by how much?
A)100 
B)75 
C)50 
D)25

Quizplus · Accepted Answer

The profit-maximizing output for an unregulated monopolist is where marginal revenue equals marginal cost. This occurs at an output level of 75 in the graph. The long-run competitive level of output is where price equals marginal cost, which occurs at an output level of 100 in the graph. The difference between these two levels of output is 25 units. Therefore, the answer is D.

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