-Suppose the Busy Bee Café is the monopoly producer of hamburgers in Hugo,Oklahoma.The above figure represents the demand,marginal revenue,and marginal cost curves for this establishment.In order to maximize profit,the Busy Bee produces ________ hamburgers per hour and sets a price of ________ per hamburger.
A) 20; $3.00
B) 20; $1.00
C) 30; $2.00
D) 30; $4.00
E) 50; $5.00

Question

-Suppose the Busy Bee Café is the monopoly producer of hamburgers in Hugo,Oklahoma.The above figure represents the demand,marginal revenue,and marginal cost curves for this establishment.In order to maximize profit,the Busy Bee produces ________ hamburgers per hour and sets a price of ________ per hamburger.
A) 20; $3.00 
B) 20; $1.00 
C) 30; $2.00 
D) 30; $4.00 
E) 50; $5.00

Quizplus · Accepted Answer

To maximize profit, a monopoly produces where marginal revenue (MR) equals marginal cost (MC) and then charges the highest price consumers are willing to pay for that quantity, which can be found on the demand curve. Choice A correctly identifies the quantity (20 hamburgers per hour) where MR equals MC and the price ($3.00) on the demand curve for that quantity.

-Suppose the Busy Bee Café Is the Monopoly Producer of Hamburgers