Figure 13.2

Figure 13.2 above shows the demand and cost curves facing a monopolist.
-Refer to Figure 13.2.Suppose the monopolist represented in the diagram above produces positive output.What is the price charged at the profit-maximizing/loss-minimizing output level?
A)$38
B)$54
C)$68
D)$75

Question

Figure 13.2
  
Figure 13.2 above shows the demand and cost curves facing a monopolist.
-Refer to Figure 13.2.Suppose the monopolist represented in the diagram above produces positive output.What is the price charged at the profit-maximizing/loss-minimizing output level?
A)$38 
B)$54 
C)$68 
D)$75

Quizplus · Accepted Answer

The profit-maximizing/loss-minimizing output level occurs where marginal cost (MC) equals marginal revenue (MR). This occurs at a quantity of 6 in the diagram above. At this quantity, the price charged is $68, as shown by the demand curve. Therefore, the correct answer is C) $68.

Figure 13.2 Figure 13.2 Above Shows the Demand and Cost Curves Facing