The data relate to a pure monopolist and the product it produces. What is the profit-maximizing output and price for this monopolist? $\begin{array} { | c | c | c | }
\hline p & Q & \text { TC } \
\hline 22 & 0 & 20 \
\hline 20 & 1 & 24 \
\hline 18 & 2 & 27 \
\hline 16 & 3 & 32 \
\hline 14 & 4 & 40 \
\hline 12 & 5 & 49 \
\hline 10 & 6 & 59 \
\hline
\end{array}$
A) P = $12; Q = 5
B) P = $14; Q = 4
C) P = $15; Q = 3
D) P = $18; Q = 2

Question

The data relate to a pure monopolist and the product it produces. What is the profit-maximizing output and price for this monopolist? $\begin{array} { | c | c | c | } 
\hline p & Q & \text { TC } \
\hline 22 & 0 & 20 \
\hline 20 & 1 & 24 \
\hline 18 & 2 & 27 \
\hline 16 & 3 & 32 \
\hline 14 & 4 & 40 \
\hline 12 & 5 & 49 \
\hline 10 & 6 & 59 \
\hline
\end{array}$
A) P = $12; Q = 5
B) P = $14; Q = 4
C) P = $15; Q = 3
D) P = $18; Q = 2

Quizplus · Accepted Answer

The profit-maximizing output is where marginal cost equals marginal revenue. At Q = 4, P = $14, total revenue (TR) is $56, and total cost (TC) is $40, giving a profit of $16, which is the highest profit.

The Data Relate to a Pure Monopolist and the Product