If a monopoly firm produces the quantity of output at which MR = MC, and charges a price greater than average total cost, it necessarily
A)minimizes the difference between total fixed cost and total variable.
B)maximizes the difference between total fixed cost and total variable cost.
C)maximizes total revenue.
D)earns profit.
E)a, b, and d

Question

Quizplus · Accepted Answer

When a monopoly produces where marginal revenue (MR) equals marginal cost (MC) and charges a price greater than average total cost (ATC), it earns a profit because the price at which it sells its product is higher than the cost of producing it. This scenario does not necessarily relate to maximizing total revenue or the differences between total fixed and variable costs.

If a Monopoly Firm Produces the Quantity of Output at Which