Figure 11-20
The profit-maximizing price the monopoly will charge in Figure 11-20 is

Question

Figure 11-20 
The profit-maximizing price the monopoly will charge in Figure 11-20 is

Quizplus · Accepted Answer

To find the profit-maximizing price, we need to look at the point where marginal revenue (MR) equals marginal cost (MC). In this case, we can see that at a quantity of 7, MR intersects with MC. From there, we can look at the demand curve to see what price corresponds with a quantity of 7. This appears to be a price of $16. Therefore, the profit-maximizing price is $16. Option A is incorrect because the firm is still producing at a quantity of 7, which means it should not shut down. Options B, D, and E are all incorrect because they do not correspond with the profit-maximizing quantity of 7.

Figure 11-20 The Profit-Maximizing Price the Monopoly Will Charge in Figure 11-20