To maximize profits, both monopolies and competitive firms must produce at the point at which price equals marginal cost.

Name: To maximize profits, both monopolies and competitive firms must produce at the point at which price equals marginal cost.
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Question

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Monopolies maximize profits by producing at the point where marginal revenue equals marginal cost, not where price equals marginal cost. In contrast, competitive firms produce at the point where price equals marginal cost.

To Maximize Profits, Both Monopolies and Competitive Firms Must Produce