The following table gives information on the price,quantity,and total cost of production for a monopolist.How much profit will the firm earn at the profit-maximizing price?

Question

Quizplus · Accepted Answer

To determine the profit-maximizing price, we need to find the quantity where marginal cost (MC) equals marginal revenue (MR). Looking at the table, we can see that MC = $6 at a quantity of 8 units. At a quantity of 8, MR is $12. Therefore, the profit-maximizing price is $12. At this price, the firm will produce and sell 8 units, which will give total revenue of $96 and total cost of production of $72, resulting in a profit of $24. However, since the question is asking for profit only at the profit-maximizing price, the answer is $12 (the total revenue at this price minus the total cost of production at this price).

The Following Table Gives Information on the Price,quantity,and Total Cost