Figure 15-4

Figure 15-4 shows the demand and cost curves for a monopolist.
-Refer to Figure 15-4.What is the amount of the monopoly's total revenue?
A)$21,600
B)$20,400
C)$19,740
D)$7,800

Question

Figure 15-4
  
Figure 15-4 shows the demand and cost curves for a monopolist.
-Refer to Figure 15-4.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

The total revenue for the monopolist is represented by the rectangle formed by the quantity sold and the price charged. In this case, the monopolist charges a price of $20 and sells 1,020 units, resulting in a total revenue of $20,400.

As for the best choice(s), it is not specified what decision the monopolist needs to make. If the question is asking for the profit-maximizing quantity and price, the answer would be to produce and sell at the quantity where marginal revenue (MR) = marginal cost (MC), which is approximately 510 units at a price of $40. If the question is asking for the consumer surplus or deadweight loss, additional information would be needed.

Figure 15-4 Figure 15-4 Shows the Demand and Cost Curves for a and Cost