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Question
Macroeconomics
Posted 3 months ago

What price and quantity will this single price monopolist charge?

Choose 1 answer:
(A) PI;QYP_{I} ; Q_{Y}
(B) PF;QXP_{F} ; Q_{X}
(c) PH;QXP_{H} ; Q_{X}
(D) PG;QYP_{G} ; Q_{Y}
() PH;QYP_{H} ; Q_{Y}
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Answer from Sia
Posted 3 months ago
Solution
a
Identifying the Profit-Maximizing Quantity: The profit-maximizing quantity for a monopolist is determined where the Marginal Cost (MC) curve intersects the Marginal Revenue (MR) curve
b
Determining the Profit-Maximizing Price: Once the profit-maximizing quantity (Qx) is identified, the corresponding price (Pf) is found on the Demand curve (D) directly above Qx
Answer
(B) PF;QXP_{F} ; Q_{X}
Key Concept
Monopolist's Profit-Maximizing Output and Price
Explanation
The monopolist will charge the price Pf for the quantity Qx, where the MC curve intersects the MR curve, indicating the profit-maximizing output, and the price is determined by the demand at that quantity

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