The profit maximizing quantity for the monopolist A) is ql. B) is q2. C) is q3. D) is q4. E) is...
Question:
The profit maximizing quantity for the monopolist A) is ql. B) is q2. C) is q3. D) is q4. E) is either q2 or q4 depending on the elasticity of demand.
Profit-maximization
Profit-maximization is the most reasonable and productive business objective of a firm or an industry. It helps determine the behaviour of a firm and the effect of various economic factors, such as price and output, in different market conditions.
Answer and Explanation: 1
The correct option is a) q1
Monopoly is a market situation where there is only one product seller with barriers to entry. It refers to a situation where one firm or a group of firms combined to control the product's supply.
The profit of a monopoly is maximized where its marginal cost (MC) is equal to marginal revenue (MR). In the below diagram, MC is equal to MR where quantity is q1.
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What is a Monopoly in Economics? - Definition & Impact on Consumers
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Chapter 7 / Lesson 2
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Understand the meaning of a monopoly in economics and what it does. Also, know the characteristics of a monopoly and the different types of monopolies.
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