The figure below illustrates the cost and revenue structure for a monopoly firm.
Figure 11-17

-Refer to Figure 11-17.The demand curve for a monopoly firm is depicted by curve

Question

The figure below illustrates the cost and revenue structure for a monopoly firm.
Figure 11-17
 
-Refer to Figure 11-17.The demand curve for a monopoly firm is depicted by curve

Quizplus · Accepted Answer

The profit-maximizing output level for a monopoly occurs where marginal revenue equals marginal cost, which is at point E in the diagram. At this output level, the monopoly charges a price of $50 and earns a profit of $1,000 (the shaded area on the graph). Therefore, choice A is the best option for the monopoly firm.

The Figure Below Illustrates the Cost and Revenue Structure for a Monopoly