Multiple choice

For a monopolist, the slope of the total cost curve is 12 and the average cost is 15 at that level of output. For maximum profit, the marginal revenue will be

  1. 12

  2. 27

  3. 3

  4. 15
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A Correct answer
Explanation

For profit maximization, a monopolist produces where Marginal Revenue (MR) equals Marginal Cost (MC). The slope of the total cost curve gives MC = 12. Therefore, at the profit-maximizing output level, MR must equal MC, which is 12. The average cost (AC = 15) is irrelevant to this condition.

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