# Calculating profit-maximizing output and price level

Please refer attached file for diagram.

The follwing diagram shows the cost structure of a mononpoly firm as well as market demand. Identify on the graph and calculate the following:

a. Profit-maximizing output level

b. Profit-maximizing price

c. Total Revenue

d. Total Cost

e. Total profit or loss.

State the correct formula and show calculations.

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#### Solution Preview

Please refer attached file for graph.

Solution:

A monopolist sets its output such that MR=MC to maximize its profits.

Let us look at the point MR and MC curves intersects each other. We find that MR and MC ...

#### Solution Summary

Solution describes the steps and formulas for calculating profit-maximizing output and price level for a monopolist. It also calculates corresponding total cost, total revenue and profit/loss.

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