Table 15-2

The government of a small developing country has granted exclusive rights to Linden Enterprises for the production of plastic syringes. Table 15-2 shows the cost and demand data for this government-protected monopolist.
-Refer to Table 15-2.What is the profit-maximizing quantity and price for the monopolist?
A)Quantity = 8 cases, Price = $9
B)Quantity = 7 cases, Price = $10
C)Quantity = 9 cases, Price = $8
D)Quantity = 10 cases, Price = $7

Question

Table 15-2
  
The government of a small developing country has granted exclusive rights to Linden Enterprises for the production of plastic syringes. Table 15-2 shows the cost and demand data for this government-protected monopolist.
-Refer to Table 15-2.What is the profit-maximizing quantity and price for the monopolist?
A)Quantity = 8 cases, Price = $9 
B)Quantity = 7 cases, Price = $10 
C)Quantity = 9 cases, Price = $8 
D)Quantity = 10 cases, Price = $7

Quizplus · Accepted Answer

The profit-maximizing quantity for a monopolist is where marginal cost equals marginal revenue. At 7 cases, the price is $10, which is likely where these conditions are met.

Table 15-2 The Government of a Small Developing Country Has Granted Exclusive