Question

Price, cost, marginal revenue of diamond $1,000 800 600 400 200 смс -200 -400 8 MR 10 16 20 Quantity of diamonds

(Figure: The Profit-Maximizing Output and Price) Use Figure: The Profit-Maximizing Output and Price. Assume that there are no fixed costs and AC = MC = $200. The profit-maximizing output for a monopolist is:

0.

20.

16.

8.


0 0
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Answer #2

For a monopoy market, the profit maximization output and price exist where the marginal cost and marginal revenue intersect .

so in the given question it can be clearly seen that marginal cost is 200 and it is intersecting marginal revenue at point A.

profit-maximizing output will be 8 units

option d is true

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