The profit-maximizing quantity of the monopolist compared to the perfectly competitive industry in the above figure are, respectively
A) Q1 and Q2.
B) Q1 and Q3.
C) Q1 and Q5.
D) Q2 and Q3.

Question

Quizplus · Accepted Answer

The profit-maximizing quantity for a monopolist occurs where their marginal revenue equals marginal cost, shown as Q1 in the graph. The profit-maximizing quantity for the perfectly competitive industry occurs where marginal cost equals the market price, shown as Q3 in the graph. Therefore, the answer is option B (Q1 for the monopolist and Q3 for the perfectly competitive industry).

The Profit-Maximizing Quantity of the Monopolist Compared to the Perfectly