P (dollars) 300 MC 210 150 120 75 MR D Q (units) 180 300 Consider the following diagram illustrating a monopolist's marginal revenue curve, marginal cost curve and the demand curve for the good/service. Assume the market were perfectly competitive. In this case, the quantity of output would be the price of output would be and O 180 units; $150 180 units; $210 300; $150
P (dollars) 300 MC 210 150 120 75 MR D Q (units) 180 300 Consider the following diagram illustrating a monopolist's marginal revenue curve, marginal cost curve and the demand curve for the good/service. Assume the market were perfectly competitive. In this case, the quantity of output would be the price of output would be and O 180 units; $150 180 units; $210 300; $150
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:The diagram depicts the following curves:
1. **Marginal Revenue (MR) Curve**: A downward sloping line which represents the additional revenue a monopolist gains from selling one more unit of a good or service.
2. **Marginal Cost (MC) Curve**: An upward sloping line indicating the cost of producing one more unit of a good or service.
3. **Demand (D) Curve**: A downward sloping line representing the quantity of a good or service that consumers are willing to buy at different prices.
The graph has two axes:
- The vertical axis labeled "P (dollars)" ranges from 75 to 300.
- The horizontal axis labeled "Q (units)" ranges from 0 to 300.
Key points on the graph:
- The MR curve intersects the MC curve at 180 units on the Q-axis, corresponding to a price level of approximately $120 on the P-axis.
- The demand curve is higher than the MR curve and intersects the vertical at a price of $300 and horizontal at a quantity of 300 units.
**Question**:
Consider the diagram illustrating a monopolist's marginal revenue curve, marginal cost curve, and the demand curve for a good/service. Assume the market were perfectly competitive. In this case, the quantity of output would be ____ and the price of output would be ____.
Choices:
- ○ 180 units; $150
- ○ 180 units; $210
- ○ 300; $150
- ○ none of the above
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