Figure 13.1

Figure 13.1 above shows the demand and cost curves facing a monopolist.
-Refer to Figure 13.1.To maximize profit, the firm will produce
A)Q₁.
B)Q₂.
C)Q₃.
D)Q₄.

Question

Figure 13.1
  
Figure 13.1 above shows the demand and cost curves facing a monopolist.
-Refer to Figure 13.1.To maximize profit, the firm will produce
A)Q₁. 
B)Q₂. 
C)Q₃. 
D)Q₄.

Quizplus · Accepted Answer

The monopolist will maximize profit by producing where marginal revenue (MR) equals marginal cost (MC). In the given graph, this occurs at output level Q₂, where MR intersects MC. Therefore, the best choice is Q₂.

Figure 13.1 Figure 13.1 Above Shows the Demand and Cost Curves Facing