Exhibit 9.7

-Refer to Exhibit 9.7,which shows the cost and revenue curves for a monopolist.Total revenue earned by the monopolist by producing the profit-maximizing output is _____
A)$95,200.
B)$84,000.
C)$79,000.
D)$52,000.
E)$42,000.

Question

Exhibit 9.7
 
-Refer to Exhibit 9.7,which shows the cost and revenue curves for a monopolist.Total revenue earned by the monopolist by producing the profit-maximizing output is _____
A)$95,200. 
B)$84,000. 
C)$79,000. 
D)$52,000. 
E)$42,000.

Quizplus · Accepted Answer

The profit-maximizing output for the monopolist is where marginal revenue (MR) equals marginal cost (MC). In this case, that occurs at a quantity of 240. At that quantity, the price charged by the monopolist is $400, and total revenue is 240*$400 = $95,200. This is the highest revenue the monopolist can earn at the profit-maximizing output level.

Exhibit 9.7 -Refer to Exhibit 9.7,which Shows the Cost and Revenue Curves