The table given below shows the prices charged and marginal cost incurred by a monopolist for different units of output.Table 11.3

-What price will the profit-maximizing firm, described in Table 11.3 charge, if the firm is earning a positive economic profit?
A)$1,500
B)$1,400
C)$1,350
D)$1,300
E)$1,550

Question

The table given below shows the prices charged and marginal cost incurred by a monopolist for different units of output.Table 11.3
 
-What price will the profit-maximizing firm, described in Table 11.3 charge, if the firm is earning a positive economic profit?
A)$1,500 
B)$1,400 
C)$1,350 
D)$1,300 
E)$1,550

Quizplus · Accepted Answer

To maximize profit, the monopolist will produce at the quantity at which marginal cost equals marginal revenue (MC=MR). In this case, the MC intersects the MR curve at Q=6. At Q=6, the monopolist's marginal cost is $1,350. Therefore, to earn a positive economic profit, the firm will charge the price of $1,350 at output level Q=6.

The Table Given Below Shows the Prices Charged and Marginal