Figure 9.3 Figure 9.3 above shows the demand and cost curves facing a monopolist.
-Refer to Figure 9.3.Suppose the monopolist represented in the diagram above produces positive output.The profit-maximising/loss-minimising output level is
A)630 units
B)800 units
C)850 units
D)880 units

Question

Figure 9.3  Figure 9.3 above shows the demand and cost curves facing a monopolist.
-Refer to Figure 9.3.Suppose the monopolist represented in the diagram above produces positive output.The profit-maximising/loss-minimising output level is
A)630 units 
B)800 units 
C)850 units 
D)880 units

Quizplus · Accepted Answer

The profit-maximizing output level is where marginal revenue equals marginal cost. In this case, marginal revenue is equal to marginal cost at an output level of 630 units.

Figure 93 Figure 9