Question

. Chapter 15/Monopoly > 647 Ans X10* Table 15-3 George has the following demand curve for selling vegemite: TR MR Price Quantity $10.00 S8.00 S6.00 3 $4.00 $2.00 MRE ME LP a proke In addition, George has a marginal cost of $3.00 per unit 146. Refer to Table 15-3. What is George's profit-maximizing level of output? a. 1 b. 2 What is Georges Pois minimizing level of operating H Q 41 MRT 1861 MR="MR Y TR d. 4 ANS: B PTS: 1 DIF: 2 REF: 15-2 TOP: Profit maximization MSC: Applicative 147. Refer to Table 15-3. What is George's profit-maximizing price? a $2 b. 54 c. 56 d $8 ANSB PTS: 1 DIF: 2 REF: 15-2 TOP: Profit maximization MSC: Applicative MYR - MC <P

Answer 1

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Price(in$)	Quantity	Total revenue	Marginal Revenue
10	1	10	-
8	2	16	6
6	3	18	2
4	4	16	-2
2	5	10	-6

Marginal Cost is $3.

Therefore profit maximizing output is 2. This is because at that level of output MR>MC. After that level of output its marginal cost exceeda its marginal revenue as a result his profit will decline. Hence Option B is correct.

B. The profit Maximizing price will be $8. The option d is correct