3. The figure presents the demand curve, marginal revenue, and marginal costs facing a monopolist producer. What is the profit-maximizing level of output?What price will the monopolist charge for the quantity in part a?Plot the profit-maximizing price and quantity from parts a and b on the graph.What are the efficiency costs (deadweight loss) of monopoly output/pricing? Provide a numerical answer and illustrate this area on the graph.What is consumer surplus under monopoly output/pricing? Illustrate this area on the graph. The graph depicted is a microeconomic representation of market dynamics often used to analyze a monopolist's decision-making process. The axes are labeled with "Price ($)" on the vertical axis and "Quantity" on the horizontal axis.**Description of Curves:**1. **Demand Curve (D)**: The demand curve is represented by the downward-sloping orange line. It shows the relationship between price and quantity demanded. As price decreases, the quantity demanded increases, indicating a typical downward slope.2. **Marginal Revenue Curve (MR)**: The marginal revenue curve is shown by the light green line, which also slopes downwards but is steeper than the demand curve. It represents the additional revenue gained from selling one more unit. It lies below the demand curve, a characteristic feature in monopoly pricing.3. **Marginal Cost Curve (MC)**: The marginal cost curve is represented by a horizontal light blue line. It indicates that the marginal cost is constant regardless of the quantity produced. This is a simplification often used for academic purposes.**Intersection Points and Economic Implications:**- The point where the MR curve intersects the MC curve is crucial for decision-making. It indicates the profit-maximizing quantity for the firm in a monopoly. In this diagram, this intersection occurs at a quantity of 6.- The corresponding price from the demand curve for this quantity gives the profit-maximizing price level, which can be read as $12 from the demand curve directly above the quantity of 6.This graphical analysis helps explain how a monopolist determines the price and output level to maximize profits, considering its unique position in the market and the absence of competitive pressures.

A monopoly is a single firm in the market producing unique good with no competition.1. Monopoly maximizes profit by producing at MR=MC. MR intersects MC at 4 units. Profit maximizing quantity is 4 2. The maximum price consumers are willing to pay for 4 units is 12. Profit maximizing price is $12 3. 4. Efficiency cost= 0.5(12-6)(8-4)= 12 Efficiency cost is shaded in the graph above 5. Consumer surplus= 0.5(18-12)*4= 12 Consumer surplus is shaded in the graph