Figure 14-3
-Refer to Figure 14-3.The demand curve for a monopoly firm is depicted by curve
A) A.
B) B.
C) C.
D) D.

Question

Figure 14-3 
-Refer to Figure 14-3.The demand curve for a monopoly firm is depicted by curve
A) A. 
B) B. 
C) C. 
D) D.

Quizplus · Accepted Answer

The monopolist will produce at the quantity where marginal revenue (MR) equals marginal cost (MC), which is where the MR curve intersects the MC curve. In this case, it is where curve A intersects the MC curve. This quantity will be sold at the price given by the demand curve at that quantity, which is the point on the demand curve directly above the chosen quantity. So, the best choice for the monopolist is to produce and sell at the quantity where MR=MC, which is represented by curve A.

Figure 14-3 -Refer to Figure 14-3.The Demand Curve for a Monopoly Firm