TABLE 12 - receives from the third unit of output $4 is...

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TABLE 1 Monopoly Output, Revenues, Costs, and Profits Output Price Total revenue Marginal revenue Total cost Average total cost Marginal cost Monopoly profits 0 $14 $0 $2 −2 1 12 12 $12 6 $6 $4 6 2 10 20 8 8 4 2 12 3 8 24 4 12 4 4 12 4 6 24 0 20 5 8 4 5 4 20 −4 35 7 15 −15 The monopolist will choose to produce 3 units of output because the marginal revenue that it 
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Unformatted text preview: receives from the third unit of output, $4, is equal to the marginal cost of producing the third unit of output, $4. The monopolist will earn $12 in profits from producing 3 units of output, the maximum possible....
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