Principles of Microeconomics / Unit 8 MIC 0716 short lesson, about 20 seconds
Profit Maximization: MR = MC, Then Price from Demand
Captions available
The idea
A monopolist produces where marginal revenue equals marginal cost, like every firm, then reads the price off demand at that quantity: above marginal revenue, so above marginal cost.
In practice
Find the quantity on marginal revenue, then go up to demand.
Where people slip
The price is not at the crossing but above it, on demand; reading it at the crossing is the standard error.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Unlocks
- 0717Finding the Monopolist's Quantity, Price and Profit
- 0718Three Myths About Monopoly
- 0719Monopoly Against Competition on the Same Curves
- 0725Price Discrimination
- 0805Profit Maximization in the Short Run
- 0908Regulating a Natural Monopoly: Four Options
- 1210Hiring Under Imperfect Competition
- 1627Monopoly, Restated
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