(Figure: Demand, Revenue, and Cost Curves) Look at the figure Demand, Revenue, and
Cost Curves. The figure shows the demand, marginal revenue, marginal cost, and
average total cost curves for Figglenuts-R-Us, a monopolist in the figglenut market. If
the government wanted to regulate Figglenuts-R-Us such that it would minimize the
deadweight loss while allowing the firm to break even, it would impose a price ceiling
of ________ in the market.
$50, where the ATC meets the MC

The figure shows the demand, marginal revenue, marginal cost, and average total cost curves for Figglenuts-R-Us, a monopolist in the figglenut market. Figglenuts-R-Us will sell 70 figglenuts and set a price of $65 to maximize profits.

What Exactly Is Marginal Revenue?

The increase in revenue that results from the sale of one additional unit of output is referred to as marginal revenue. While marginal revenue can remain constant over a certain level of output, it is subject to the law of diminishing returns and will eventually slow down as the level of output increases.

A cost curve is a graph of production costs as a function of total quantity produced in economics. In a free market economy, productively efficient firms optimize their production process by minimizing costs at each possible level of production, yielding a cost curve.

Firms must ensure that any given output level is produced at the lowest possible cost in order to maximize profits, and then choose the price-output combination that results in total revenue exceeding total cost by the greatest amount possible.

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Complete question

The figure shows the demand, marginal revenue, marginal cost, and average total cost curves for Figglenuts-R-Us, a monopolist in the figglenut market. Figglenuts-R-Us will sell ________ figglenuts and set a price of ________ to maximize profits.

70; $30

70; $65

100; $50

120; $40