A Monopolist Is Maximizing Profit at an Output Rate of 1,000

question 66

Multiple Choice

A monopolist is maximizing profit at an output rate of 1,000 units per month. At this output rate, the price that its customers are willing and able to pay is $8 per unit, average total cost is $5 per unit, and marginal cost is $6 per unit. It may be concluded that at this monthly output rate, marginal revenue is

• A) $5 per unit, and the monopolist earns zero economic profits.
• B) $6 per unit, and the monopolist earns economic profits of $2,000 per month.
• C) $6 per unit, and the monopolist earns economic losses of $1,000 per month.
• D) $6 per unit, and the monopolist earns economic profits of $3,000 per month.

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