Question on: JAMB Economics - 2004

The diagram above represents the short-run position of a monopolist. The profit-maximizing output is

Q₃

Q₄

Q₁

Q₂

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Correct Option: A

The profit-maximizing output for a monopolist is where marginal cost (MC) equals marginal revenue (MR). In the diagram, this occurs at the intersection of the MC and MR curves.

Identify the MC and MR curves: Locate the Marginal Cost (MC) curve and the Marginal Revenue (MR) curve on the graph.
Find the intersection: Determine the point where the MC and MR curves intersect.
Trace down to the quantity axis: From the intersection point, draw a vertical line down to the quantity axis (x-axis). The point where this line meets the quantity axis represents the profit-maximizing output level. In the diagram, this point corresponds to Q2.