-Refer to Figure 9-6. The profit-maximising output and price for the monopolist are
A) output = 62; price = $24.
B) output = 62; price = $18.
C) output = 83; price = $22.
D) output = 104; price = $20.80.

Question

-Refer to Figure 9-6. The profit-maximising output and price for the monopolist are
A) output = 62; price = $24. 
B) output = 62; price = $18. 
C) output = 83; price = $22. 
D) output = 104; price = $20.80.

Quizplus · Accepted Answer

The profit-maximizing output is where marginal revenue equals marginal cost. From the graph, we can see that this occurs at an output of 62 units. The profit-maximizing price is then found by adding the marginal cost to the marginal revenue at the profit-maximizing output. From the graph, we can see that the marginal cost at an output of 62 units is $18. Therefore, the profit-maximizing price is $18 + $6 = $24.