The following figure shows the revenue and cost curves of a monopolist. Figure 24.3 D: Average Revenue
MR: Marginal Revenue
ATC: Average Total Cost
MC: marginal Cost
Consider the monopolist described in Figure 24.3.The firm can maximize profit by producing:

Question

The following figure shows the revenue and cost curves of a monopolist. Figure 24.3  D: Average Revenue
MR: Marginal Revenue
ATC: Average Total Cost
MC: marginal Cost
Consider the monopolist described in Figure 24.3.The firm can maximize profit by producing:

Quizplus · Accepted Answer

The monopolist maximizes profit at the quantity where marginal revenue (MR) equals marginal cost (MC). In this case, that occurs at point Qs1U1B12, where the MC curve intersects the MR curve. At this quantity, the monopolist charges a price of P1 and produces a quantity of Q1.

The Following Figure Shows the Revenue and Cost Curves of a Monopolist