Exhibit 8-5 Demand and cost data for a monopolist

-Refer to Exhibit 8-5.The demand schedule and cost schedule for a monopolist are provided.Which output level maximizes profit?
A) 2.
B) 6.
C) 4.
D) 5.
E) 7.

Question

Exhibit 8-5 Demand and cost data for a monopolist
 
-Refer to Exhibit 8-5.The demand schedule and cost schedule for a monopolist are provided.Which output level maximizes profit?
A) 2. 
B) 6. 
C) 4. 
D) 5. 
E) 7.

Quizplus · Accepted Answer

The profit-maximizing output level for a monopolist is where marginal cost (MC) equals marginal revenue (MR). Without the exhibit, we assume that option C (output level 4) is where this condition is met.

Exhibit 8-5 Demand and Cost Data for a Monopolist