Use the following to answer question(s): A Profit-Maximizing Monopoly Firm

-(Exhibit: A Profit-Maximizing Monopoly Firm) This profit-maximizing monopoly firm's cost per unit at its profit-maximizing quantity is:
A) $8.
B) $15.
C) $16.
D) $18.

Question

Use the following to answer question(s): A Profit-Maximizing Monopoly Firm
 
-(Exhibit: A Profit-Maximizing Monopoly Firm) This profit-maximizing monopoly firm's cost per unit at its profit-maximizing quantity is:
A) $8. 
B) $15. 
C) $16. 
D) $18.

Quizplus · Accepted Answer

The profit-maximizing output level is where MR=MC, which is at 4 units in this graph. At that output level, the price is $20. The cost per unit is shown as the distance between the ATC and AVC curves at the quantity of 4 units, which is $16. Therefore, the correct answer is C.

Use the Following to Answer Question(s): a Profit-Maximizing Monopoly Firm