Figure 15-2
The figure below illustrates the cost and revenue structure for a monopoly firm.

-For a monopoly firm,the shape and position of the demand curve play a role in determining (i) the profit-maximizing price.
(ii) the shape and position of the marginal cost curve.
(iii) the shape and position of the marginal revenue curve.

Question

Figure 15-2
The figure below illustrates the cost and revenue structure for a monopoly firm.
 
-For a monopoly firm,the shape and position of the demand curve play a role in determining (i)	the profit-maximizing price.
(ii)	the shape and position of the marginal cost curve.
(iii)	the shape and position of the marginal revenue curve.

Quizplus · Accepted Answer

The profit-maximizing price is determined by where the marginal revenue equals the marginal cost, which is affected by the shape and position of the demand curve (i). The shape and position of the marginal revenue curve are also affected by the demand curve (iii), as they are directly related. The shape and position of the marginal cost curve, however, are not affected by the demand curve, as it is solely determined by the firm's production costs. Hence, the correct answer is (i) and (iii) only, which is Choice C.

Figure 15-2 the Figure Below Illustrates the Cost and Revenue Structure for Structure