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Figure: The Profit-Maximizing Output and Price
-(Figure: The Profit-Maximizing Output and Price) Look at the figure The Profit-Maximizing Output and Price. Assume that there are no fixed costs and AC = MC = $200. The monopolist who can use price discrimination perfectly will produce an output of _____ diamonds.
A) 0
B) 6
C) 16
D) 20

Question

Use the following to answer questions:
Figure: The Profit-Maximizing Output and Price 
-(Figure: The Profit-Maximizing Output and Price) Look at the figure The Profit-Maximizing Output and Price. Assume that there are no fixed costs and AC = MC = $200. The monopolist who can use price discrimination perfectly will produce an output of _____ diamonds.
A) 0 
B) 6 
C) 16 
D) 20

Quizplus · Accepted Answer

The monopolist who can use price discrimination perfectly will produce an output where MR = MC. In this case, MR = MC = $200 at an output of 16 diamonds.

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