pills.) As the figure illustrates, total revenue for a monopolist has the shape of a hill, first rising, next flattening

out, and then falling. In this example, total revenue is highest at a quantity of 6 or 7.

However, the monopolist is not seeking to maximize revenue, but instead to earn the highest possible profit. In

the HealthPill example in Figure 9.4, the highest profit will occur at the quantity where total revenue is the

farthest above total cost. This looks to be somewhere in the middle of the graph, but where exactly? It is easier

to see the profit maximizing level of output by using the marginal approach, to which we turn next.

Marginal Revenue and Marginal Cost for a Monopolist

In the real world, a monopolist often does not have enough information to analyze its entire total revenues or

total costs curves. After all, the firm does not know exactly what would happen if it were to alter production
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