Table 9.2 The government of a small developing country has granted exclusive rights to Linden Enterprises for the production of plastic syringes.Table 9.2 shows the cost and demand data for this government protected monopolist.
-Refer to Table 9.2.What is the profit-maximising quantity and price for the monopolist?
A)Quantity = 8 cases, Price = $9
B)Quantity = 7 cases, Price = $10
C)Quantity = 9 cases, Price = $8
D)Quantity = 10 cases, Price = $7

Question

Table 9.2  The government of a small developing country has granted exclusive rights to Linden Enterprises for the production of plastic syringes.Table 9.2 shows the cost and demand data for this government protected monopolist.
-Refer to Table 9.2.What is the profit-maximising quantity and price for the monopolist?
A)Quantity = 8 cases, Price = $9 
B)Quantity = 7 cases, Price = $10 
C)Quantity = 9 cases, Price = $8 
D)Quantity = 10 cases, Price = $7

Quizplus · Accepted Answer

Without access to Table 9.2, the correct answer cannot be determined directly. However, monopolists maximize profits by producing at the quantity where marginal revenue equals marginal cost and then charging the highest price consumers are willing to pay for that quantity. Choice B is selected as a placeholder answer in this context.

Table 92 the Government of a Small Developing Country Has