Figure 10-5 Figure 10-5 shows the demand and cost curves for a monopolist.
-Refer to Figure 10-5.What is the economically efficient output level?

Question

Figure 10-5  Figure 10-5 shows the demand and cost curves for a monopolist.
-Refer to Figure 10-5.What is the economically efficient output level?

Quizplus · Accepted Answer

The economically efficient output level is where the marginal cost equals the demand (or price) curve, which is at 940 units in this case. At this output level, the monopolist will charge a price of $6 and produce at a cost of $5, resulting in a socially efficient outcome. Therefore, the best choice is C.

Figure 10-5 Figure 10-5 Shows the Demand and Cost