If a monopolist that is maximizing its profits charges a price of $16, has an average total cost of $10 and a marginal cost of $8, and sells 50 units of output, then its marginal revenue is _____, and its profit is:

Question

Quizplus · Accepted Answer

For a monopolist maximizing profit, marginal revenue (MR) equals marginal cost (MC), so MR is $8. Profit is calculated as (Price - Average Total Cost) * Quantity = ($16 - $10) * 50 = $300.

If a Monopolist That Is Maximizing Its Profits Charges a Price