Use the following to answer questions:
Figure: Monopolist
-(Figure: Monopolist) Refer to the figure. Based on the demand curves for a monopolist's product in two different markets-Market A and Market B-what price should the monopolist charge in Market A?
A) $5
B) $10
C) $7
D) any price higher than $10

Question

Use the following to answer questions:
Figure: Monopolist 
-(Figure: Monopolist) Refer to the figure. Based on the demand curves for a monopolist's product in two different markets-Market A and Market B-what price should the monopolist charge in Market A?
A) $5 
B) $10 
C) $7 
D) any price higher than $10

Quizplus · Accepted Answer

The monopolist should charge the price where marginal revenue equals marginal cost. In Market A, this occurs at a price of $10.

Use the Following to Answer Questions