The Following Figures Show the Demand and Cost Curves of a Perfectly

question 89

Multiple Choice

The following figures show the demand and cost curves of a perfectly competitive firm and a monopoly respectively.Figure 11.7
D: Average Revenue
AC: Average cost
MC: Marginal cost
MR: Marginal cost
-Refer to Figure 11.7. At the profit maximizing level of output, the monopolist will:

• A)earn economic profit.
• B)earn super-normal profit.
• C)charge a price equal to the marginal cost of production.
• D)charge a price lower than the price charged by a perfectly competitive firm.
• E)zero profit.

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