Figure 8-9 Figure 8-9 shows the demand and cost curves for a monopolist.
-Refer to Figure 8-9.At the profit-maximising quantity,what is the difference between the monopoly's price and the marginal cost of production?

Question

Figure 8-9  Figure 8-9 shows the demand and cost curves for a monopolist.
-Refer to Figure 8-9.At the profit-maximising quantity,what is the difference between the monopoly's price and the marginal cost of production?

Quizplus · Accepted Answer

In a monopoly, the profit-maximizing quantity is where marginal cost (MC) equals marginal revenue (MR), but the price is set higher on the demand curve. The difference between the monopoly's price and the marginal cost is typically positive, and in this case, it is $21.

Figure 8-9 Figure 8-9 Shows the Demand and Cost