Table: Monopolist

Refer to the table. What is the monopolist's profit-maximizing level of output?
A) 3
B) 4
C) 5
D) 6

Question

Table: Monopolist

Refer to the table. What is the monopolist's profit-maximizing level of output?
A) 3 
B) 4 
C) 5 
D) 6

Quizplus · Accepted Answer

The monopolist's profit-maximizing level of output is determined where marginal revenue (MR) equals marginal cost (MC). In this case, at an output of 4, the MR is equal to $10 and the MC is also equal to $10. At any output level below 4, the MR is greater than the MC, indicating that the monopolist can increase profits by producing more. At any output level above 4, the MC is greater than the MR, indicating that the monopolist can increase profits by producing less. Therefore, the best choice is B, with an output of 4.

Table: Monopolist Refer to the Table. What Is the Monopolist's Profit-Maximizing Level