Figure 7.1 -Figure 7.1 Shows a Monopolist's Demand Curve. If the Monopolist

question 76

Multiple Choice

Figure 7.1
-Figure 7.1 shows a monopolist's demand curve. If the monopolist were to maximize its total revenue, it would produce ________ units of output and charge a price of ________.

• A) 3; $5
• B) 4; $4
• C) 5; $3
• D) 6; $2

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Definitions:

Equilibrium Quantity

The quantity of goods or services supplied and demanded at the equilibrium price, where the quantity supplied equals the quantity demanded.

Equilibrium Price

The price at which the quantity of goods supplied equals the quantity of goods demanded.

Constant Cost Industry

An industry in which the costs of production, including the prices of inputs, do not change as the total output of the industry changes.

Total Cost

The complete cost of production, including both fixed and variable costs.