The table given below shows the price,marginal revenue and marginal cost of a monopolist at different levels of the output.The firm does not incur a fixed cost of production. Table 10.4

- Refer to Table 10.4 and calculate the total revenue earned by the monopolist at the profit maximizing level of output.
A)$60.
B)$16.
C)$52.
D)$42.
E)$30.

Question

The table given below shows the price,marginal revenue and marginal cost of a monopolist at different levels of the output.The firm does not incur a fixed cost of production. Table 10.4

- Refer to Table 10.4 and calculate the total revenue earned by the monopolist at the profit maximizing level of output.
A)$60. 
B)$16. 
C)$52. 
D)$42. 
E)$30.

Quizplus · Accepted Answer

To determine the profit-maximizing level of output for a monopolist, we must look for the output level where marginal revenue (MR) equals marginal cost (MC). In this case, we can see that at an output of 5 units, MR = MC = $8.

To calculate the total revenue earned at this output level, we can use the formula: total revenue = price x quantity. The price that the monopolist charges is $12 per unit, so:

total revenue = ($12 per unit) x (5 units) = $60

Therefore, the correct answer is (C) $52.

The Table Given Below Shows the Price,marginal Revenue and Marginal