Figure 15-5
-Refer to Figure 15-5. A profit-maximizing monopoly will charge a price of
A)P1.
B)P2.
C)P3.
D)P4.

Name: Figure 15-5 -Refer to Figure 15-5. A profit-maximizing monopoly will charge a price of A)P1. B)P2. C)P3. D)P4.
Brand: Quizplus
Rating: 4.9 (26 reviews)

Question

Figure 15-5 
-Refer to Figure 15-5. A profit-maximizing monopoly will charge a price of
A)P1. 
B)P2. 
C)P3. 
D)P4.

Quizplus · Accepted Answer

The profit-maximizing monopoly will choose the price where Marginal Revenue (MR) equals Marginal Cost (MC), which is at output Q2. From there, it will charge the highest price consumers are willing to pay, which is P2. Therefore, the monopoly will charge a price of P2.

Figure 15-5 -Refer to Figure 15-5. a Profit-Maximizing Monopoly Will Charge a Will