Table 15-3
Consider the following demand and cost information for a monopoly.
-Refer to Table 15-3. To maximize profit, the monopolist sets price at

Question

Table 15-3
Consider the following demand and cost information for a monopoly. 
-Refer to Table 15-3. To maximize profit, the monopolist sets price at

Quizplus · Accepted Answer

To maximize profit, the monopolist should set output where MR=MC. Looking at the table, at an output of 2, MR=MC=$20. Therefore, the monopolist should set the price at $20 to maximize profit. At this price, the monopolist will produce 2 units, and earn a profit of ($20x2)-($4x2)=$32.

Table 15-3 Consider the Following Demand and Cost Information for a Monopoly