Refer to the above graph.The pure monopolist firm will charge a price of:

Name: Refer to the above graph.The pure monopolist firm will charge a price of:
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Question

Quizplus · Accepted Answer

The profit maximizing output level is where MR=MC, which is at point U1. From point U1, draw a line straight down to the demand curve to find the corresponding price, which is PS1U1. Therefore, the pure monopolist firm will charge a price of P₃.

Refer to the Above Graph