The figures given below represent the revenue curves of a monopolist.Figure 11.2
TR: Total revenue curve
AR: Average revenue curve
MR: Marginal revenue curve
-Refer to Figure 11.2. In order to maximize profits, what quantity should the monopolist produce?
A)B
B)E
C)Between B and E
D)Impossible to determine because we are not given the cost curves.
E)Impossible to determine because we are not given the demand curve.

Question

The figures given below represent the revenue curves of a monopolist.Figure 11.2
  TR: Total revenue curve
AR: Average revenue curve
MR: Marginal revenue curve
-Refer to Figure 11.2. In order to maximize profits, what quantity should the monopolist produce?
A)B 
B)E 
C)Between B and E 
D)Impossible to determine because we are not given the cost curves. 
E)Impossible to determine because we are not given the demand curve.

Quizplus · Accepted Answer

To maximize profits, a monopolist needs to produce at the quantity where marginal revenue (MR) equals marginal cost (MC). Without information on the cost curves, it's impossible to determine the profit-maximizing quantity.

The Figures Given Below Represent the Revenue Curves of a Monopolist.Figure