ofits, Sandy should atput to the point where MR= MC. The market price won't change because monopc %3D utput to the point where MR > MC and increase price based on the demand curve. utput to the point where MR = MC and increase price based on the demand curve. utput to the point where MR= MC and decrease price based on the demand curve. %3D 23
ofits, Sandy should atput to the point where MR= MC. The market price won't change because monopc %3D utput to the point where MR > MC and increase price based on the demand curve. utput to the point where MR = MC and increase price based on the demand curve. utput to the point where MR= MC and decrease price based on the demand curve. %3D 23
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:**Monopoly: End of Chapter Problem**
**11.** Sandy owns the only landscaping company in town that specializes in flower gardens—thus, Sandy is a monopolist. At a quantity of 10 flower gardens, the marginal cost of producing one more flower garden is $300, and the marginal revenue from selling one more flower garden is $250.
To maximize profits, Sandy should
- ☐ decrease output to the point where \(MR = MC\). The market price won’t change because monopolists are price takers.
- ☐ decrease output to the point where \(MR > MC\) and increase price based on the demand curve.
- ☐ decrease output to the point where \(MR < MC\) and increase price based on the demand curve.
- ☐ increase output to the point where \(MR = MC\) and decrease price based on the demand curve.
There are no additional graphs or diagrams accompanying this text.
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