-The figure above shows the demand,marginal revenue,and marginal cost curves for Paul's Parrot pillows,a single-price monopoly producer of pillows stuffed with parrot feathers.When Paul maximizes his profit,the difference between marginal cost and price
A) $0.
B) $40.
C) $60.
D) $30.
E) $20.

Question

-The figure above shows the demand,marginal revenue,and marginal cost curves for Paul's Parrot pillows,a single-price monopoly producer of pillows stuffed with parrot feathers.When Paul maximizes his profit,the difference between marginal cost and price
A) $0. 
B) $40. 
C) $60. 
D) $30. 
E) $20.

Quizplus · Accepted Answer

In a monopoly, the profit-maximizing quantity is where marginal cost (MC) equals marginal revenue (MR). The price is determined by the demand curve at this quantity, which is higher than the marginal cost. The difference between the price and marginal cost is the monopoly markup.

-The Figure Above Shows the Demand,marginal Revenue,and Marginal Cost Curves