Exhibit 8-8 Profit maximizing for a monopolist The profit-maximizing output for the monopolist in Exhibit 8-8 is: A) zero. B) OQ₁. C) OQ₂ D) OQ₃.

Question

Quizplus · Accepted Answer

The profit-maximizing output is where marginal revenue (MR) equals marginal cost (MC) and the monopolist charges a price based on the demand curve at that output level. In Exhibit 8-8, the MC curve intersects the MR curve at point Q, which corresponds to an output level of _{2. At this output level, the price charged by the monopolist is}. Therefore, the profit-maximizing output for the monopolist is OQ₂.

Exhibit 8-8 Profit Maximizing for a Monopolist the Profit-Maximizing Output