(Table: Monopoly) The monopolist represented in the table has a marginal cost per unit of $4 times the quantity produced. The profit-maximizing price for this monopolist would be
$\begin{array}{|c|c|}
\hline \boldsymbol{Q} & \boldsymbol{P} \
\hline 0 & 90 \
\hline 3 & 81 \
\hline 6 & 72 \
\hline 9 & 63 \
\hline 12 & 54 \
\hline 15 & 45 \
\hline 18 & 36 \
\hline 21 & 27 \
\hline 24 & 18 \
\hline 27 & 9 \
\hline 30 & 0 \
\hline
\end{array}$
A) $63.
B) $54.
C) $45.
D) $36.

Question

Quizplus · Accepted Answer

To find the profit-maximizing price for the monopolist, we need to determine where marginal revenue (MR) equals marginal cost (MC). Given that MC = $4 times the quantity (Q), we calculate MC for each quantity and compare it to the marginal revenue, which can be inferred from the change in total revenue as quantity increases. The table does not directly provide MR, but we can deduce the profit-maximizing quantity by looking for where the cost to produce one more unit (MC) equals the additional revenue from selling one more unit (MR). Without the explicit MR calculations, we approximate based on the given MC formula and the prices that could potentially yield a MR equal to MC. Since the MC increases with quantity, and the price decreases as quantity increases, the optimal price is likely at a higher price point where the MC of producing that quantity is just covered by the revenue from selling it. $63 is the closest to a price point where this balance would be achieved, considering the MC formula and the decreasing price with increasing quantity.

(Table: Monopoly) the Monopolist Represented in the Table Has a Marginal