Suppose the accompanying figure shows the demand curve, marginal revenue curve and marginal cost curve for a monopolist. The profit-maximizing price for this monopolist to charge is:
A)A.
B)B.
C)C.
D)E.

Question

Suppose the accompanying figure shows the demand curve, marginal revenue curve and marginal cost curve for a monopolist.  The profit-maximizing price for this monopolist to charge is:
A)A. 
B)B. 
C)C. 
D)E.

Quizplus · Accepted Answer

MC = MR at F units of output. From the demand curve, we can see that this corresponds to a price of B.

Suppose the Accompanying Figure Shows the Demand Curve, Marginal Revenue