Answer the question on the basis of the following table showing the demand schedule facing a nondiscriminating monopolist: $\begin{array}{ccc}
P & & Q_{d} \
\hline
\$10 & & 1 \
7&&2\
5 & & 3 \
3 & & 4 \
1 & & 5
\end{array}$ Refer to the table.Assume that this monopolist faces zero production costs.The profit-maximizing monopolist will set a price of:

Question

Quizplus · Accepted Answer

A monopolist maximizes profit by producing where marginal revenue (MR) equals marginal cost (MC). Since this monopolist faces zero production costs, MR equals the price of the good. The profit-maximizing monopolist will set a price of $5, where the quantity demanded is 3, because at that price, MR=$5=$MC and any higher price will result in lower profits, while any lower price will also result in lower profits. Therefore, the answer is (C) $5.

Answer the Question on the Basis of the Following Table PQd$10172533415\begin{array}{ccc}P & & Q_{d} \\\hline\$10 & & 1 \\7&&2\\5 & & 3 \\3 & & 4 \\1 & & 5\end{array}P$107531​​Qd​12345​​

Answer the Question on the Basis of the Following Table $\begin{array}{ccc}P & & Q_{d} \\\hline\$10 & & 1 \\7&&2\\5 & & 3 \\3 & & 4 \\1 & & 5\end{array}$