The following figure shows the demand curve ES, the average cost curve AC, the marginal cost curve MC, and the marginal revenue curve MR for a firm.
Figure 8-1

-Refer to Figure 8-1. If the firm operates as a monopoly in an unregulated market, its profit-maximizing price and output would be _____, respectively.
A) C and Q
B) A and Q
C) B and R
D) D and P
E) A and T

Question

The following figure shows the demand curve ES, the average cost curve AC, the marginal cost curve MC, and the marginal revenue curve MR for a firm.
Figure 8-1
 
-Refer to Figure 8-1. If the firm operates as a monopoly in an unregulated market, its profit-maximizing price and output would be _____, respectively.
A) C and Q 
B) A and Q 
C) B and R 
D) D and P 
E) A and T

Quizplus · Accepted Answer

In a monopoly, the firm maximizes profit where marginal cost (MC) equals marginal revenue (MR). The corresponding price is found on the demand curve. If C and Q represent this intersection and the corresponding price on the demand curve, then they are the profit-maximizing price and output.

The Following Figure Shows the Demand Curve ES, the Average