Exhibit 8-7 Monopolist As shown in Exhibit 8-7, in the short run, the monopoly will:

Name: Exhibit 8-7 Monopolist As shown in Exhibit 8-7, in the short run, the monopoly will:
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Question

Exhibit 8-7  Monopolist  As shown in Exhibit 8-7, in the short run, the monopoly will:

Quizplus · Accepted Answer

The profit-maximizing level of output for the monopoly is where marginal revenue (MR) equals marginal cost (MC), which is 6 units of output in this case. At that level of output, the price is $40 per unit. The average total cost (ATC) is $20 per unit. Therefore, the monopoly's hourly profit is ($40 - $20) x 6 = $120.

Exhibit 8-7 Monopolist as Shown in Exhibit 8-7, in the Short