A monopolistic seller of rare oriental rugs discovers that 60% of the population is willing to pay $1,000 for a rug. The remaining 40% of the population is willing to pay $2000. Each rug costs $600 to produce. How much should the monopolist charge for each rug? a. $600

b. $1000

c. $1500

d. $2000

Question

Business

Joel Burns

2 December, 07:42

A monopolistic seller of rare oriental rugs discovers that 60% of the population is willing to pay $1,000 for a rug. The remaining 40% of the population is willing to pay $2000. Each rug costs $600 to produce. How much should the monopolist charge for each rug? a. $600

b. $1000

c. $1500

d. $2000

+3

Answers (1)

Know the Answer?

Naima Nicholson · Answer 1

Option "D" is the correct answer to the following statement.

Explanation:

In this situation seller is a monopolist, he would charge the highest amount for his Goods or service, 40% of the total population will pay $2,000 for particular goods and services.

He is a monopolistic seller, so people will have to buy and Consume particular goods from him.

Profit For each beg should be highest if he sells his item at $2,000 each

Total Profit = Sales price - Cost

= $2,000 - $600

= $1,400

A monopolistic seller of rare oriental rugs discovers that 60% of the population is willing to pay $1,000 for a rug. The remaining 40% of the population is willing to pay $2000. Each rug costs $600 to produce. How much should the monopolist charge for each rug? a. $600b. $1000c. $1500d. $2000

A monopolistic seller of rare oriental rugs discovers that 60% of the population is willing to pay $1,000 for a rug. The remaining 40% of the population is willing to pay $2000. Each rug costs $600 to produce. How much should the monopolist charge for each rug? a. $600

b. $1000

c. $1500

d. $2000