Question

A profit-maximizing monopolist charges a price of $12. The intersection of the marginal revenue and marginal cost curves occurs where output is 10 units and marginal cost is $6. Average total cost for 10 units of output is $5. What is the monopolist's profit?

a. $70
b. $100
c. $120
d. $60

Answer 1

a. $70

Step-by-step explanation:

Price $12 x 10 units =$120

(-)Total cost $5 x 10 units =$50

________________________________

Profit =$70