Table 15-4
A monopolist faces the following demand curve:
-Refer to Table 15-4. The monopolist will not produce
A)5 units or fewer under any circumstances.
B)7.5 units or fewer under any circumstances.
C)7.5 units or more under any circumstances.
D)10 units or more under any circumstances.

Question

Table 15-4
A monopolist faces the following demand curve: 
-Refer to Table 15-4. The monopolist will not produce
A)5 units or fewer under any circumstances. 
B)7.5 units or fewer under any circumstances. 
C)7.5 units or more under any circumstances. 
D)10 units or more under any circumstances.

Quizplus · Accepted Answer

At 10 units of output, the monopolist can charge a price of $15, which is greater than its marginal cost of $10. Therefore, producing 10 units will increase the monopolist's profit, and it will not shut down production at this level of output.

Table 15-4 A Monopolist Faces the Following Demand Curve