Price and cost (cents per newspaper) Tiny is a small, isolated community served

Question

Price and cost (cents per newspaper) Tiny is a small, isolated community served by one newspaper that can meet the market demand at a lower cost than two or more newspapers could. The Tiny Intelligencer is the only source of news. The graph shows the marginal cost of printing the Tiny Intelligencer and the market demand for it. The Tiny Intelligencer is a profit-maximizing, single-price monopoly. What is the efficient number of copies of the newspaper and what is the price at which the efficient number MC copies could be sold? The efficient number of copies of the Thy Intelligencer is L1 and the price at which this number could be sold iscents a copy of 60 100 200 300 400 500 Quantity (newspapers per day)

Explanation / Answer

Efficient outcome will be achieved at a point where demand is equal to supply. Here MC is the supply curve so both curve intersect each other at a price of $70 and quantity of 150 newspapers.

The efficient number of copies of the tiny intelligencer is 150 and the price at which this number could be sold is $70 cents a copy

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