Below is the demand curve faced by a pure monopolist. Move the interactive point

Question

Below is the demand curve faced by a pure monopolist. Move the interactive point to identify where marginal revenue (MR) = marginal cost (MC) for this monopolist and answer the questions below. 1. What is the monopolist's profit maximizing price? Output? Price Output 2. Are positive long run profits possible under this market structure? Positive long run economic profits are definite. Positive long run economic profits are possible if barriers to entry remain high. Long run economic profits will be zero.

Explanation / Answer

Marginal revenue (MR) = Marginal cost (MC) at points (400, 2)

Price = $6

Output = 400 Units

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