Scenario 15-2
A monopoly firm maximizes its profit by producing Q = 500 units of output.At that level of output,its marginal revenue is $30,its average revenue is $60,and its average total cost is $34.
-Refer to Scenario 15-2.At Q = 500,the firm's marginal cost is
A) less than $30.
B) $30.
C) $34.
D) greater than $34.

Question

Quizplus · Accepted Answer

To maximize profit, a monopoly firm produces where MR = MC. At Q = 500, the firm's MR is $30. Therefore, the firm's MC at Q = 500 must also be $30 for profit maximization. The question does not provide information on the firm's MC, but it can be inferred that it must be equal to the MR at the profit-maximizing level of output. Therefore, the answer is B.

Scenario 15-2 A Monopoly Firm Maximizes Its Profit by Producing Q =