Monopolies and competitive firms pursuing profit maximization both choose to produce at the quantity where marginal revenue equals marginal cost.

Question

Quizplus · Accepted Answer

This is because both types of firms aim to maximize their profits by producing at the level where they can earn the most revenue while minimizing the cost of production. This occurs at the quantity where marginal revenue (the additional revenue earned from producing one more unit) equals marginal cost (the additional cost of producing one more unit).

Monopolies and Competitive Firms Pursuing Profit Maximization Both Choose to Produce