Exhibit 10-2 -To Ascertain the Profit-Maximizing Price on a Monopoly Diagram, One

Multiple Choice

Exhibit 10-2
-To ascertain the profit-maximizing price on a monopoly diagram, one must first determine output by finding where

A) marginal cost and marginal revenue cross, and then doubling the amount indicated on the vertical axis to determine price.
B) marginal cost and demand cross, and then looking at the vertical axis to determine price.
C) marginal cost and marginal revenue cross, and then extending upward to the demand curve to determine price on the vertical axis.
D) marginal cost and marginal revenue cross, and then looking at that point on the vertical axis to determine price.
E) marginal revenue crosses the horizontal axis, and then noting what price demand indicates at that output level.