A monopoly will set price
A) at the highest price along its demand curve.
B) equal to the value at which marginal cost intersects the demand curve.
C) so that it can sell the quantity at which marginal revenue is equal to marginal cost.
D) so that it can sell the quantity at which marginal revenue is equal to zero.

Question

Quizplus · Accepted Answer

Monopolies determine their output level where marginal revenue (MR) equals marginal cost (MC), and then they set the price based on the demand curve at that quantity. This allows them to maximize profit.

A Monopoly Will Set Price