1. The following diagram pertains to a single?price monopoly. a.This profit-maximizing firm would produce units of output. The firm would set the price of the product at $_______ . The firm?s profit is $ the optimal level of output. Solution Profit is Maximized at point MR=MC MR and MC intersect at quantity=250 Quantity=250 intersect the demand curve at price=$4 This Profit-maximizing firm would produce 250 thousands of bushels per year unit of Output. The firm would set price of the product at $4 The firm Profit=Revenue-ATC=250*1000*4-250*1000*3=$250,000(AVC at quantity 250=$3).