Suppose a monopolist faces the demand curve shown. If the monopolist's marginal cost is constant and equal to $30, its profit-maximizing level of output is:
A)50 units.
B)40 units.
C)20 units.
D)30 units.

Question

Suppose a monopolist faces the demand curve shown.  If the monopolist's marginal cost is constant and equal to $30, its profit-maximizing level of output is:
A)50 units. 
B)40 units. 
C)20 units. 
D)30 units.

Quizplus · Accepted Answer

Like a perfectly competitive firm, a monopolist maximizes profit by choosing the output level at which marginal revenue equals marginal cost.

Suppose a Monopolist Faces the Demand Curve Shown