select the correct location on the graph. indicate the point where a monopoly will set its output.
select the correct location on the graph. indicate the point where a monopoly will set its output.
Answer
Answer:
The point where the marginal - cost curve intersects the marginal - revenue curve (the lower yellow point).
Explanation:
Step1: Recall monopoly profit - maximization rule
A monopoly maximizes profit where marginal revenue (MR) equals marginal cost (MC).
Step2: Identify relevant intersection
On the graph, the intersection of the marginal - cost (green) and marginal - revenue (red) curves determines the profit - maximizing output level. At this output level, the monopoly sets its output to maximize its profit.