What is the profit-maximizing combination of output and price for the single price monopoly shown here?

Choose 1 answer:
(A) $Q_{1} \& P_{4}$
(B) $Q_{2} \& P_{3}$
(C) $Q_{1} \& P_{1}$
(D) $Q_{2} \& P_{1}$
(E) $Q_{1} \& P_{3}$
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Review of revenue and cost graphs for a monopoly
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Question

What is the profit-maximizing combination of output and price for the single price monopoly shown here?

Choose 1 answer:
(A) $Q_{1} \& P_{4}$
(B) $Q_{2} \& P_{3}$
(C) $Q_{1} \& P_{1}$
(D) $Q_{2} \& P_{1}$
(E) $Q_{1} \& P_{3}$
Related content
Review of revenue and cost graphs for a monopoly
Report a problem

Accepted Answer

∻Solution∻ ‖ a ⋮ Profit Maximization in Monopoly: A monopoly maximizes profit where marginal revenue (MR) equals marginal cost (MC). ‖ ‖ b ⋮ Determining Output and Price: The profit-maximizing output is found at the quantity where MR intersects MC. The corresponding price is found on the demand curve directly above this quantity. ‖ ∻Answer∻ ⚹ (C) $Q_{1} \& P_{1}$ ⚹ ∻Key Concept∻ ⚹ Profit Maximization Point ⚹ ∻Explanation∻ ⚹ The profit-maximizing output and price for a monopoly are determined at the quantity where MR equals MC, and the corresponding price is found on the demand curve. In the provided graph, this occurs at $Q_{1} \& P_{1}$.◊How does the profit-maximizing output level change for a single-price monopoly when there is an increase in fixed costs?⍭ Generate me a similar question◊⚹

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