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Economics Optimization Step by Step Calculator

A: Marginal Cost |
B: Profit Function |
C: Total Revenue |
D: Demand Curve

User Prisan
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1 Answer

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Final answer:

A monopolist determines its profit-maximizing level of output by finding the point where marginal revenue is equal to marginal cost.

Step-by-step explanation:

To determine the profit-maximizing level of output, a monopolist can use the points on the demand curve to calculate total revenue and then determine marginal revenue. The profit-maximizing quantity occurs where marginal revenue (MR) equals marginal cost (MC). This can be seen in graphs and tables where MR intersects with MC. For example, in Figure 9.6, MR = MC occurs at an output of 5.

User Abhilash Chandran
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