Use the figure to answer the following question(s).
Figure 11-10

Given the cost and revenue curves illustrated in Figure 11-10, what price will a profit-maximizing monopolist charge?

Question

Use the figure to answer the following question(s).
Figure 11-10

Given the cost and revenue curves illustrated in Figure 11-10, what price will a profit-maximizing monopolist charge?

Quizplus · Accepted Answer

A monopolist maximizes profits by choosing the quantity where marginal revenue (MR) equals marginal cost (MC). In the graph, MR is the same as the demand curve. At the quantity represented by point ₄, MR equals MC. The price corresponding to this quantity is P ₄. Therefore, a profit-maximizing monopolist will charge P ₄.

Use the Figure to Answer the Following Question(s)