The profit-maximizing decision for the monopolist is:
A)to produce at the quantity where marginal cost equals marginal revenue.
B)the same as that of the perfectly competitive firm.
C)to choose price according to demand.
D)All of these are true.

Question

Quizplus · Accepted Answer

All of these statements are true regarding the profit-maximizing decision for a monopolist. A monopolist will produce at the quantity where marginal cost equals marginal revenue, similar to a perfectly competitive firm. However, unlike a perfectly competitive firm, a monopolist has the ability to choose its price based on the demand curve, as it is the sole supplier in the market.

The Profit-Maximizing Decision for the Monopolist Is