A monopolist maximizes profits at the output at which
A)total revenue is at its greatest, assuming that the firm has both fixed and variable costs.
B)price equals marginal cost.
C)price exceeds marginal cost by the greatest amount.
D)none of the above

Question

Quizplus · Accepted Answer

A monopolist maximizes profits where marginal revenue equals marginal cost, not necessarily where total revenue is greatest or where price equals marginal cost.

A Monopolist Maximizes Profits at the Output at Which