Figure 14-6
-Refer to Figure 14-6.In order to maximize profits,the monopolist should produce
A) 9 units.
B) 12 units.
C) 15 units.
D) more than 15 units.

Question

Figure 14-6 
-Refer to Figure 14-6.In order to maximize profits,the monopolist should produce
A) 9 units. 
B) 12 units. 
C) 15 units. 
D) more than 15 units.

Quizplus · Accepted Answer

To maximize profits, the monopolist should produce at the quantity where marginal revenue (MR) equals marginal cost (MC). From the graph, we can see that at 12 units of production, MR = MC. At this quantity, the monopolist can set the price at $15 and earn a total profit of $60, which is the largest profit achievable among the options given. Therefore, the best choice is B) 12 units.

Figure 14-6 -Refer to Figure 14-6.In Order to Maximize Profits,the Monopolist Should