Figure 15-5
Figure 15-5 shows the demand and cost curves for a monopolist.
-Refer to Figure 15-5.What is the economically efficient output level?

Question

Figure 15-5  
Figure 15-5 shows the demand and cost curves for a monopolist.
-Refer to Figure 15-5.What is the economically efficient output level?

Quizplus · Accepted Answer

The socially efficient output level is where marginal cost equals marginal revenue, which is at output level of 940 units. At this output level, the price is equal to marginal cost and there is no deadweight loss. Therefore, the best choice is to produce 940 units.