refer to a monopoly that faces a demand curve given by and has a constant marginal cost as 0.2.
-In this situation the monopoly's profit maximizing output level is:
A)0.2.
B)0.4.
C)0.5.
D)0.7.

Question

refer to a monopoly that faces a demand curve given by  and has a constant marginal cost as 0.2.
-In this situation the monopoly's profit maximizing output level is:
A)0.2. 
B)0.4. 
C)0.5. 
D)0.7.

Quizplus · Accepted Answer

A monopoly maximizes profit where marginal revenue equals marginal cost. Without specific details on costs and revenues, it's impossible to accurately determine the profit-maximizing output level. However, if this question implies that 0.4 is the output level where marginal revenue equals marginal cost, then option B would be the correct choice.

Refer to a Monopoly That Faces a Demand Curve Given