Suppose that a monopolist is operating at its profit-maximizing point. If the marginal cost of production at this point is $4, the average total cost is $6, and the profit per unit is $ 6, then the marginal revenue is _____, and the price charged by the monopolist is:

Question

Quizplus · Accepted Answer

The monopolist maximizes profit where marginal cost (MC) equals marginal revenue (MR), so MR is $4. The profit per unit is price minus average total cost, so $6 = price - $6, thus the price is $12.

Suppose That a Monopolist Is Operating at Its Profit-Maximizing Point