Figure 10-3
Figure 10-3 above shows the demand and cost curves facing a monopolist.
-Refer to Figure 10-3.Suppose the monopolist represented in the diagram above produces positive output.What is the price charged at the profit-maximizing/loss-minimizing output level?
A) $38
B) $54
C) $68
D) $75

Question

Figure 10-3
  Figure 10-3 above shows the demand and cost curves facing a monopolist.
-Refer to Figure 10-3.Suppose the monopolist represented in the diagram above produces positive output.What is the price charged at the profit-maximizing/loss-minimizing output level?
A) $38 
B) $54 
C) $68 
D) $75

Quizplus · Accepted Answer

The profit-maximizing output for a monopolist is where marginal cost (MC) equals marginal revenue (MR). At this output level, the price is determined by the demand curve. In the diagram, this corresponds to a price of $68.

Figure 10-3 Figure 10-3 Above Shows the Demand and Cost