Figure 8.6 Figure 8.6 shows the cost and demand curves for a monopolist.
-Refer to Figure 8.6.What are the profit-maximising output and price for the monopolist?

Question

Figure 8.6  Figure 8.6 shows the cost and demand curves for a monopolist.
-Refer to Figure 8.6.What are the profit-maximising output and price for the monopolist?

Quizplus · Accepted Answer

The profit-maximizing output is where marginal revenue equals marginal cost. From the graph, we can see that this occurs at an output of 62 units. The profit-maximizing price is then found by adding the marginal cost to the marginal revenue at the profit-maximizing output. From the graph, we can see that the marginal cost at an output of 62 units is $18. Therefore, the profit-maximizing price is $18 + $6 = $24.

Figure 86 Figure 8