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Company XYZ is a profit-maximizing monopoly in the production of good A.Below shows the demand (Qd), marginal cost (MC) and marginal revenue (MR) schedules for
Company XYZ is a profit-maximizing monopoly in the production of good A.Below shows the demand (Qd), marginal cost (MC) and marginal revenue (MR) schedules for XYZ.
Price ($) per unit of A
10
9
8
7
6
5
Qd for A (unit)
10
12
14
16
18
20
MR of A ($)
n.a.
8
4
0
-4
-8
MC of A ($)
2
3
4
5
6
7
What is the social optimal quantity?
A.14
B.18
C.16
D.20
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