Asked by
Nathan Irwin
on Dec 19, 2024Verified
Suppose that a pure monopolist can sell 5 units of output at $4 per unit and 6 units at $3.90 per unit. For the monopolist to profitably produce and sell the sixth unit of output, its marginal cost must be anywhere at or below
A) $4.
B) $3.90.
C) $3.50.
D) $3.40.
Marginal Cost
The change in total cost that arises when the quantity produced is incremented by one unit; essentially, it is the cost of producing one more unit of a good.
Output
The quantity of goods or services produced by a firm or economy.
- Acquire knowledge on the rule of profit maximization (MR=MC) and its implementation for both monopolies and competitive organizations.
- Examine the impact of variations in marginal cost on the output and pricing strategies of a monopolist.
Verified Answer
LB
Learning Objectives
- Acquire knowledge on the rule of profit maximization (MR=MC) and its implementation for both monopolies and competitive organizations.
- Examine the impact of variations in marginal cost on the output and pricing strategies of a monopolist.