Table 15-1

-Refer to Table 15-1.Assume this monopolist's marginal cost is constant at $11.What quantity (Q) of output will it produce and what price (P) will it charge
A)Q = 4; P = $25
B)Q = 4; P = $26
C)Q = 5; P = $23
D)Q = 7; P = $17

Question

Table 15-1
 
-Refer to Table 15-1.Assume this monopolist's marginal cost is constant at $11.What quantity (Q) of output will it produce and what price (P) will it charge
A)Q = 4; P = $25 
B)Q = 4; P = $26 
C)Q = 5; P = $23 
D)Q = 7; P = $17

Quizplus · Accepted Answer

A monopolist maximizes profit where marginal cost (MC) equals marginal revenue (MR). Given MC is constant at $11, the monopolist will produce where MR = $11. Assuming Table 15-1 shows MR at Q = 5 is $11, the monopolist will produce 5 units and charge the corresponding price of $23.

Table 15-1 -Refer to Table 15-1.Assume This Monopolist's Marginal Cost Is Constant