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Figure: A Profit-Maximizing Monopoly Firm
-(Figure: A Profit-Maximizing Monopoly Firm)Use Figure: A Profit-Maximizing Monopoly Firm.This firm's cost per unit at its profit-maximizing quantity is:
A)$8.
B)$15.
C)$18.
D)$20.

Question

Use the following to answer question:
Figure: A Profit-Maximizing Monopoly Firm 
-(Figure: A Profit-Maximizing Monopoly Firm)Use Figure: A Profit-Maximizing Monopoly Firm.This firm's cost per unit at its profit-maximizing quantity is:
A)$8. 
B)$15. 
C)$18. 
D)$20.

Quizplus · Accepted Answer

At the profit-maximizing quantity of 6 units, the monopolist's marginal revenue equals its marginal cost, which is $18. This means that each additional unit produced would cost $18, and any price above that would provide a positive economic profit for the firm. Therefore, the cost per unit at the profit-maximizing quantity is $18.

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