Table 15-8
The following table provides information on the price, quantity, and average total cost for a monopoly.
-Refer to Table 15-8. What is the maximum profit that the monopolist can earn?

Question

Table 15-8
The following table provides information on the price, quantity, and average total cost for a monopoly. 
-Refer to Table 15-8. What is the maximum profit that the monopolist can earn?

Quizplus · Accepted Answer

The monopolist can earn the maximum profit of $20 by producing and selling 4 units at a price of $50 per unit. At this level of output, the average total cost is $30 and the marginal revenue is also $30. This means that marginal cost equals marginal revenue and the monopolist is maximizing profits. Any quantity higher or lower than 4 units will result in lower profits.

Table 15-8 the Following Table Provides Information on the Price, Quantity, and Quantity