A monopolist maximizes profits by setting the quantity where:
A)marginal revenue equal to marginal cost.
B)marginal revenue greater than marginal cost.
C)marginal revenue less than marginal cost.
D)total revenue as high as possible.

Question

Quizplus · Accepted Answer

A monopolist maximizes profits by producing the quantity where marginal revenue equals marginal cost, as this is the point where the cost of producing an additional unit is exactly covered by the revenue it generates, maximizing profit.

A Monopolist Maximizes Profits by Setting the Quantity Where