When a monopolist chooses to produce at the level of output where marginal cost equals marginal revenue:
A)profits are maximized.
B)price is equal to marginal revenue.
C)price is equal to average total costs.
D)total revenue is maximized.

Question

Quizplus · Accepted Answer

When a monopolist produces at the level where marginal cost equals marginal revenue, it maximizes profits. This is a fundamental principle of microeconomics for profit-maximizing firms, including monopolies.

When a Monopolist Chooses to Produce at the Level of Output