Exhibit 8-8 Profit maximizing for a monopolist

-The profit-maximizing output for the monopolist in Exhibit 8-8 is:

Question

Exhibit 8-8 Profit maximizing for a monopolist
 
-The profit-maximizing output for the monopolist in Exhibit 8-8 is:

Quizplus · Accepted Answer

The profit-maximizing output occurs where marginal revenue (MR) equals marginal cost (MC). In the given diagram, the MC curve intersects the MR curve at point Q₂. At this output level, the monopolist can charge a price of P₂ and earn maximum profits. Any output level higher or lower than Q₂ would result in lower profits. Therefore, the best choice for profit-maximizing output for the monopolist is OQ₂.

Exhibit 8-8 Profit Maximizing for a Monopolist