Exhibit 9.7

-Refer to Exhibit 9.7,which shows the cost and revenue curves for a monopolist.If the monopolist does not price discriminate among its customers,the total amount consumers will spend on its profit-maximizing output is _____
A)$95,200.
B)$84,000.
C)$79,000.
D)$53,200.
E)$42,000.

Question

Exhibit 9.7
 
-Refer to Exhibit 9.7,which shows the cost and revenue curves for a monopolist.If the monopolist does not price discriminate among its customers,the total amount consumers will spend on its profit-maximizing output is _____
A)$95,200. 
B)$84,000. 
C)$79,000. 
D)$53,200. 
E)$42,000.

Quizplus · Accepted Answer

The total amount consumers will spend on the monopolist's profit-maximizing output is equal to the area under the demand curve above the price line. In this case, the profit-maximizing price is $14, and the profit-maximizing output is 6,000 units. The area under the demand curve above the price line is a triangle with a base of 6,000 units and a height of $14. The area of a triangle is equal to (1/2) * base * height, so the area under the demand curve above the price line is (1/2) * 6,000 * $14 = $42,000.

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