By adhering to the MR = MC rule, a single-price monopoly
A)will always have an above-zero profit.
B)will always have a normal profit.
C)maximizes its profit, which may in some cases mean minimizing its losses.
D)is not earning as large a profit as it can by setting MR = (MC - P).

Question

Quizplus · Accepted Answer

The MR = MC rule is a profit maximization rule that applies to firms in various market structures, including monopolies. By setting marginal revenue (MR) equal to marginal cost (MC), a firm maximizes its profit. This does not guarantee positive profit; it means the firm is operating as efficiently as possible given its cost structure and demand. In some cases, especially if average total costs are high, this could mean minimizing losses rather than earning a profit.

By Adhering to the MR = MC Rule, a Single-Price