Multiple Choice
If the monopolist's fixed cost is $25, the monopoly's total costs when maximizing profit is:
12. Monopoly
Monopoly Efficiency and Deadweight Loss
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An unregulated monopoly will sell:
A
30 tickets
B
50 tickets
C
60 tickets
D
100 tickets
Verified step by step guidance1
Identify the key curves on the graph: the Demand (D) curve, the Marginal Cost (MC) curve, and the Marginal Revenue (MR) curve.
Recall that a monopoly maximizes profit by producing the quantity where Marginal Revenue (MR) equals Marginal Cost (MC).
Locate the point on the graph where the MR curve intersects the MC curve. This intersection determines the profit-maximizing quantity for the monopoly.
From the intersection point, draw a vertical line down to the quantity axis to find the number of tickets the monopoly will sell.
Verify the quantity by checking the options provided and ensure it matches the quantity determined from the graph.
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