This graph shows a demand curve from point E to point S, an average cost curve labeled AC, a marginal cost curve labeled MC, and a marginal revenue curve labeled MR. Under average-cost pricing, the equilibrium price and output in the market are _____, respectively.
(A) B and R
(B) A and T
(C) C and Q
(D) D and P
(E) A and Q
Homework Answers
Answer : The answer is option C.
Here MR = MC occurs at quantity level of Q where the price level is C. For monopoly the equilibrium condition is MR = MC. Hence here the equilibrium price is C and quantity is Q. Therefore, option C is correct.
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curves. Management wants to adjust the production output quantity
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Give your answer by dragging the Q line to a new position to mark
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revenue (MR), marginal cost (MC), and average total cost (ATC)
curves. Management wants to adjust the production output quantity
to maximize the firm's profits. What quantity should the firm aim
for?
Give your answer by dragging the Q line to a new position to mark
the quantity at which profit is as large as possible.
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