Table 7.2-Monopoly costs and revenue
-In Table 7.2,using the profit-maximization rule,a monopolist will charge a price of:
A) $90.
B) $80.
C) $70.
D) $60.

Question

Table 7.2-Monopoly costs and revenue 
-In Table 7.2,using the profit-maximization rule,a monopolist will charge a price of:
A) $90. 
B) $80. 
C) $70. 
D) $60.

Quizplus · Accepted Answer

The profit-maximization rule for a monopolist is to produce at the quantity where marginal cost (MC) equals marginal revenue (MR). The price charged is then determined from the demand curve at that quantity. Without seeing Table 7.2, the correct answer cannot be determined directly from the information provided. However, based on the principle, the monopolist will choose the price that aligns with the quantity where MC = MR, which is typically not the highest or lowest price but somewhere in between, depending on the demand and cost structure. Given only the choices and no data, this explanation outlines the general rule a monopolist follows to determine price.

Table 7.2-Monopoly Costs and Revenue