Table 7.2-Monopoly costs and revenue
-In Table 7.2,at the profit-maximizing rate of output,marginal cost is:
A) $50.
B) $60.
C) $70.
D) $80.

Question

Table 7.2-Monopoly costs and revenue 
-In Table 7.2,at the profit-maximizing rate of output,marginal cost is:
A) $50. 
B) $60. 
C) $70. 
D) $80.

Quizplus · Accepted Answer

At the profit-maximizing rate of output, marginal revenue is equal to marginal cost. From the table, we can see that at an output level of 8, the marginal revenue is $420 and at an output level of 9, the marginal revenue is $390. Therefore, the profit-maximizing output level is 8. At an output level of 8, the marginal cost is $60.

Table 7.2-Monopoly Costs and Revenue