-Refer to Figure 9-9. At the profit-maximising quantity, what is the difference between the monopoly's price and the marginal cost of production?
A) $8
B) $11.50
C) $21
D) There is no difference.

Question

-Refer to Figure 9-9. At the profit-maximising quantity, what is the difference between the monopoly's price and the marginal cost of production?
A) $8 
B) $11.50 
C) $21 
D) There is no difference.

Quizplus · Accepted Answer

In a monopoly, the profit-maximizing quantity is where marginal cost (MC) equals marginal revenue (MR). The monopoly's price is set above this point on the demand curve. The difference between the monopoly's price and the marginal cost is the monopoly's markup, which is $21 according to the given options.