Setting the Right Price for a Nondiscriminating Pure Monopolist

According to the table, what price should the monopolist set?

a. $265

b. $215

c. $325

d. $175

Final Answer:

The price that the nondiscriminating pure monopolist should set is $215.

To determine the price that the monopolist should set, we need to analyze the relationship between output, total cost, and product price. The monopolist aims to maximize profits, which can be achieved by setting the price at a level that maximizes the difference between total revenue and total cost.

Looking at the table, we can see that as the product price decreases, the total cost also decreases. However, the total revenue is dependent on the product price and the quantity sold. To find the price that maximizes profits, we need to find the point where the difference between total revenue and total cost is the highest.

By analyzing the table, we can see that at a product price of $215, the total cost is $480, and the total revenue is $265. At a product price of $325, the total cost is $290, and the total revenue is $325. At a product price of $175, the total cost is $700, and the total revenue is $175.

Based on this analysis, we can conclude that the monopolist should set its price at $215, as it maximizes the difference between total revenue and total cost, resulting in higher profits.