The following figure shows the demand curve, the marginal revenue (MR), ma the a

Question

The following figure shows the demand curve, the marginal revenue (MR), ma the average total cost curve (ATC) of a monopolist. marginal cost curve (MC) and Price/Cost ATC Demand 2 MR 0 50 100 1s0 200 250 300 350 400 450 500 550 600 650 700 750 800 850 900 Quantity (units) 44) Refer to the figure above. What is the profit-maximizing price for the monopolist? A) $3 B) $4 C) $5 D) $6 45) Refer to the figure above. When the monopolist is free to set the price, A) it makes a profit of $150 B) it makes a loss of $150 C) it makes a profit of $300 D) it makes a loss of $300

Explanation / Answer

Q44
Answer
The firm produces at MR=MC,
where
Q=300
and the price is found at the quantity from demand curve, that is equal to $6
Option S
Q45
Profit=(P-ATC)*Q
=(6-5)*300
=$300
Option D

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