Table 15-5

-Refer to Table 15-5.If the monopolist faces a constant marginal cost of $1,how much output should the firm produce?
A) 3 units
B) 4 units
C) 5 units
D) 6 units

Question

Table 15-5
 
-Refer to Table 15-5.If the monopolist faces a constant marginal cost of $1,how much output should the firm produce?
A) 3 units 
B) 4 units 
C) 5 units 
D) 6 units

Quizplus · Accepted Answer

A monopolist maximizes profit where marginal revenue equals marginal cost. If the marginal cost is constant at $1, the firm should produce where marginal revenue is also $1. Without the table, we assume that at 5 units, marginal revenue equals marginal cost.

Table 15-5 -Refer to Table 15-5.If the Monopolist Faces a Constant Marginal