Figure 10-6
Figure 10-6 shows the cost and demand curves for a monopolist.
-Refer to Figure 10-6.The profit-maximizing output and price for the monopolist are
A) output = 62; price = $24.
B) output = 62; price = $18.
C) output = 83; price = $22.
D) output = 104; price = $20.80.

Question

Figure 10-6
  Figure 10-6 shows the cost and demand curves for a monopolist.
-Refer to Figure 10-6.The profit-maximizing output and price for the monopolist are
A) output = 62; price = $24. 
B) output = 62; price = $18. 
C) output = 83; price = $22. 
D) output = 104; price = $20.80.

Quizplus · Accepted Answer

The profit-maximizing output is where marginal revenue equals marginal cost. From the graph, we can see that this occurs at an output of 62. The profit-maximizing price is then determined by the demand curve, which shows that at an output of 62, the price is $24.

Figure 10-6 Figure 10-6 Shows the Cost and Demand Curves