Figure 16-4Refer to Figure 16-4. How much output will the monopolist produce in order to maximize profit?

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BlackTom AI · Accepted Answer

The provided data for this item is incomplete. The question refers to Figure 16-4 and asks how much output a monopolist will produce to maximize profit, but the answer options are not listed (the 'answer_options' field is empty). Without the actual set of answer choices to evaluate, we cannot perform a choice-by-choice analysis of each option.

What we can discuss, in general terms, is the standard rule a monopolist uses to maximize profit: produce the quantity where marginal revenue (MR) equals marginal cost (MC), provided that this quantity yields a non-negative profit (i.e., price covers average total cost). In most diagrams of monopoly supply decisions, the profit-maximizing quantity is found at the intersection of the MR and MC curves. The associated price is then read off the demand curve at that quantity.

If the figure labels specific quantities along the horizontal axis (for example T, W, Z), and one of those marks corresponds to the MR = MC intersection, that mark would be the profit-maximizing output. The corresponding price would be determined by the demand curve at that output level. However, since we don’t have the actual options to compare, we cannot confirm which label (T, W, Z, or another) matches MR = MC in this particular figure.

In summary, to answer correctly you would:
- Identify the MR and MC curves on the figure.
- Locate their intersection point; that quantity is the monopolist’s profit-maximizing output.
- Read the corresponding price from the demand curve at that output level.
- Choose the option that matches that quantity on the horizontal axis.

If you can provide the actual list of answer options (the text for options a, b, c, d, etc.), I can give a complete, option-by-option analysis and indicate precisely why the correct choice corresponds to the MR = MC output in Figure 16-4.

Figure 16-4Refer to Figure 16-4. How much output will the monopolist produce in order to maximize profit?

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