Use the following to answer question(s): Monopoly Model

-(Exhibit: Monopoly Model) The profit-maximizing price is the one indicated by the distance:
A) WZ.
B) JD.
C) KE.
D) LF.

Question

Use the following to answer question(s): Monopoly Model
 
-(Exhibit: Monopoly Model) The profit-maximizing price is the one indicated by the distance:
A) WZ. 
B) JD. 
C) KE. 
D) LF.

Quizplus · Accepted Answer

The profit-maximizing price is where marginal revenue (MR) is equal to marginal cost (MC), which in this case is at point J. Therefore, the distance between J and D, which corresponds to the price that yields the profit-maximizing output level, is the correct choice.

Use the Following to Answer Question(s): Monopoly Model