The table below shows the price and output combinations at different output levels for a non price-discriminating monopolist. The profit-maximizing output for this monopolist is _____.
Table 9.6

A)1 unit
B)2 units
C)3 units
D)4 units
E)5 units

Question

The table below shows the price and output combinations at different output levels for a non price-discriminating monopolist. The profit-maximizing output for this monopolist is _____.​ ​
Table 9.6
​​

A)1 unit​ 
B)2 units 
C)3 units 
D)4 units 
E)5 units

Quizplus · Accepted Answer

The monopolist will choose the output level at which marginal revenue (MR) equals marginal cost (MC) in order to maximize profit. At 3 units of output, MR equals MC at a price of $50, which is the highest possible price the monopolist can charge. At any output level above or below 3 units, the monopolist's profits would be lower. Therefore, 3 units is the profit-maximizing output for this monopolist.

The Table Below Shows the Price and Output Combinations at Different