A monopolist faces the following demand curve: Quantity Price 10 $46 20 $42 30 $38 40 $34 50 $30 60 $26 7

A monopolist faces the following demand curve:

Quantity Price
10 $46
20 $42
30 $38
40 $34
50 $30
60 $26
70 $22
80 $18
90 $14
100 $10

If the marginal cost of production is constant at $18 per unit, this profit-maximizing monopolist will choose to produce

a. 50 units.
b. 40 units.
c. 20 units.
d. 30 units

 

 

 

 

 

 

 

answer:

 

He shoul choose to produce 20 as marginal revenue is greater than marginal cost after 20 at 30 marginal revenue will be lesser than marginal cost which will break the profit maximization point which is MR=MC. Hence C is Corrrect.

 

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