In the graph below, a profit maximizing firm with market power will sell a quantity of _____ at a price of _____.
Understand the Problem
The question is asking to determine the quantity that a profit-maximizing firm with market power will sell and the corresponding price based on the graph provided.
Answer
E; B
The final answer is E; B.
Answer for screen readers
The final answer is E; B.
More Information
In monopoly, firms maximize profit where MR equals MC. The price is then found on the demand curve at this quantity.
Tips
A common mistake is using the intersection of demand and MC for price and quantity instead of MR and MC.
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