question 58\nthe graph shows the costs and revenues of an unregulated monopoly. this unregulated monopoly…

question 58\nthe graph shows the costs and revenues of an unregulated monopoly. this unregulated monopoly would maximize profit by setting output and price at which of the following?\na) output: q1 price: p3\nb) output: q1 price: p1\nc) output: q1 price: p2\nd) output: q2 price: p2\ne) output: q3 price: p3

question 58\nthe graph shows the costs and revenues of an unregulated monopoly. this unregulated monopoly would maximize profit by setting output and price at which of the following?\na) output: q1 price: p3\nb) output: q1 price: p1\nc) output: q1 price: p2\nd) output: q2 price: p2\ne) output: q3 price: p3

Answer

Explanation:

Step1: Recall profit - maximization condition

A monopoly maximizes profit where marginal revenue (MR) equals marginal cost (MC). In the graph, MR = MC at output level $Q_1$.

Step2: Determine the price

The price is determined by the demand (D) curve at the profit - maximizing output level. At output $Q_1$, the corresponding price on the demand curve is $P_1$.

Answer:

B. Output: $Q_1$ Price: $P_1$