Graph 15-4 This graph depicts the demand and marginal-cost curves of a profit-maximising monopolist.Use the graph to answer the following question(s).
-Refer to Graph 15-4.A benevolent social planner would cause the monopoly firm to operate at an output level:
A)above q₀
B)equal to q₀
C)below q₀
D)equal to zero

Question

Graph 15-4  This graph depicts the demand and marginal-cost curves of a profit-maximising monopolist.Use the graph to answer the following question(s).
-Refer to Graph 15-4.A benevolent social planner would cause the monopoly firm to operate at an output level:
A)above q₀ 
B)equal to q₀ 
C)below q₀ 
D)equal to zero

Quizplus · Accepted Answer

A benevolent social planner aims to maximize social welfare, which occurs where marginal cost (MC) equals marginal benefit (MB), represented by the demand curve. In Graph 15-4, this equilibrium is at q₀, where the monopoly's marginal cost intersects the demand curve.

Graph 15-4 This Graph Depicts the Demand and Marginal-Cost