Chapter 9, Problem 33P

Draw a monopolist’s demand curve, marginal revenue, and marginal cost curves. Identify the monopolist’s profit-maximizing output level. Now, think about a slightly higher level of output ${\text{(say Q}}_{\text{0}}+\text{1)}$.

According to the graph, is there any consumer willing to pay more than the marginal cost of that new level of output? If so, what does this mean?