Figure 16-6

Watanabe Sensei operates the only martial arts school in Hartfield. For simplicity, assume that consumers have identical demand curves and that Sensei knows what this demand curve is. Figure 16-6 shows this demand curve.
-Refer to Figure 16-6.If Sensei acts as a single-price monopolist, his profit-maximizing price is ________ and the number of classes sold is ________.
A)P₀; Q₀
B)P₀; Q₁
C)P₁; Q₀
D)P₁; Q₁

Question

Figure 16-6
  
Watanabe Sensei operates the only martial arts school in Hartfield. For simplicity, assume that consumers have identical demand curves and that Sensei knows what this demand curve is. Figure 16-6 shows this demand curve.
-Refer to Figure 16-6.If Sensei acts as a single-price monopolist, his profit-maximizing price is ________ and the number of classes sold is ________.
A)P₀; Q₀ 
B)P₀; Q₁ 
C)P₁; Q₀ 
D)P₁; Q₁

Quizplus · Accepted Answer

A single-price monopolist maximizes profit where marginal revenue equals marginal cost. At this point, the monopolist will set the price according to the demand curve. In this scenario, the price is P₁ and the quantity is Q₁.

Figure 16-6 Watanabe Sensei Operates the Only Martial Arts School in Hartfield