Figure 7.1:
-In Figure 7.1,the price charged by a profit-maximizing monopolist is:
A) $5.00.
B) $7.00.
C) $9.00.
D) Between $6.00 and $7.00.

Question

Figure 7.1:  
-In Figure 7.1,the price charged by a profit-maximizing monopolist is:
A) $5.00. 
B) $7.00. 
C) $9.00. 
D) Between $6.00 and $7.00.

Quizplus · Accepted Answer

A profit-maximizing monopolist sets the price based on where marginal cost (MC) equals marginal revenue (MR), then uses the demand curve to determine the price consumers are willing to pay at that quantity. Without seeing Figure 7.1, the correct answer typically involves understanding this principle. Given the options, $7.00 is chosen as a plausible price point that a monopolist might set to maximize profits, assuming it aligns with the intersection of MC and MR and the corresponding point on the demand curve.