Figure 13.3

Figure 13.3 shows the demand and cost curves for a monopolist.
-Refer to Figure 13.3.What is the amount of the monopoly's total revenue?
A)$21,600
B)$20,400
C)$19,740
D)$7,800

Question

Figure 13.3
  
Figure 13.3 shows the demand and cost curves for a monopolist.
-Refer to Figure 13.3.What is the amount of the monopoly's total revenue?
A)$21,600 
B)$20,400 
C)$19,740 
D)$7,800

Quizplus · Accepted Answer

Total revenue is equal to the price multiplied by the quantity sold. The monopolist maximizes profit by producing the quantity at which marginal cost equals marginal revenue. In this case, the profit-maximizing quantity is 180 units, which corresponds to a price of $120. Total revenue is then calculated as price times quantity, which is $120 times 180 units, equaling $20,400. Therefore, the correct answer is option B.

Figure 13.3 Figure 13.3 Shows the Demand and Cost Curves for a and Cost