Figure 13.5

Figure 13.5 shows the demand and cost curves for a monopolist.
-Refer to Figure 13.5.What is the economically efficient output level?
A)600 units
B)800 units
C)940 units
D)1160 units

Question

Figure 13.5
  
Figure 13.5 shows the demand and cost curves for a monopolist.
-Refer to Figure 13.5.What is the economically efficient output level?
A)600 units 
B)800 units 
C)940 units 
D)1160 units

Quizplus · Accepted Answer

The economically efficient output level is where the marginal cost (MC) intersects the demand curve (D), which is at 940 units in this case. At this output level, the monopolist can maximize their profits while also producing the quantity that is most beneficial to society. Producing any higher or lower output would result in a loss to either the monopolist or society. Therefore, producing 940 units is the best choice.

Figure 13.5 Figure 13.5 Shows the Demand and Cost Curves for a and Cost