-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 price is ________ per pillow and the marginal cost is ________ per pillow.
A) $60; $60
B) $60; $40
C) $70; $60
D) $70; $40
E) $100; $40

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 price is ________ per pillow and the marginal cost is ________ per pillow.
A) $60; $60 
B) $60; $40 
C) $70; $60 
D) $70; $40 
E) $100; $40

Quizplus · Accepted Answer

In a monopoly, profit maximization occurs where marginal revenue equals marginal cost. The price is determined by the demand curve at this quantity. Here, the marginal cost is $40, and the corresponding price on the demand curve is $70.

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