Figure 11-9
-From Figure 11-9, indicate the maximum profit a pure monopolist with the cost and demand conditions above would be able to achieve.

Question

Figure 11-9 
-From Figure 11-9, indicate the maximum profit a pure monopolist with the cost and demand conditions above would be able to achieve.

Quizplus · Accepted Answer

The maximum profit is achieved when the marginal revenue (MR) curve intersects the marginal cost (MC) curve. In this case, the MR curve intersects the MC curve at point E. The maximum profit is then given by the area of the rectangle BFEC.

Figure 11-9 -From Figure 11-9, Indicate the Maximum Profit a Pure Monopolist