To maximize profit a monopolist will produce the level of output where:
A) marginal revenue is equal to average cost.
B) average revenue is equal to marginal cost.
C) marginal revenue is equal to marginal cost.
D) average revenue is equal to average cost.

Question

Quizplus · Accepted Answer

A monopolist will maximize profit by producing the level of output where marginal revenue is equal to marginal cost. At any other level of output, either marginal revenue will exceed marginal cost or vice versa, resulting in a decrease in profit.

To Maximize Profit a Monopolist Will Produce the Level of Output