A fairly straightforward question. We know that any profit maximizing firm will choose to sell where MR = MC it this case, as shown above, this is where output is 5 and price is 10.

1. If the monopolist depicted in Figure 1 is maximizing profits, the correct price/output combination will be:
1. Price = 6, Quantity = 6. First of all, at an output of 6 MC > MR so that the added costs of producing the 6^th unit exceeds the added revenue, and at an output of 6 the price would need to be around 9 or more than 6 would be demanded.
2. Price = 3, Quantity = 5. At a price of 3 much more than 5 units would be demanded. We can see from the Demand curve that for the firm to sell only 5 units it must charge a price of 10, 3 is the MC of the 5^th unit of output.
3. Price = 10, Quantity = 5.
4. Price =7, Quantity = 8. At price =7, quantity = 8 the firm is earning exactly zero profits. If it were interested in practicing rather extreme limit pricing this is the lowest price/greatest output it would choose even in the short run.
5. Price = 8, Quantity = 7. This combination is where the MC curve intersects the demand curve but MC is far higher than MR at this level of output. If the firm were able to price discriminate it would be willing to sell the 7^th unit for a price of 8, but no other units
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