Which of the following statements concerning profit maximisation for a monopoly firm is correct? A)P MR = MC B)P MC D)P = MR = MC

Question

Which of the following statements concerning profit maximisation for a monopoly firm is correct?
A)P > MR = MC
B)P < MR = MC
C)P = MR > MC
D)P = MR = MC

Quizplus · Accepted Answer

In a monopoly, the price (P) is greater than marginal revenue (MR), and profit maximization occurs where MR equals marginal cost (MC). This is because a monopolist faces a downward-sloping demand curve, meaning that to sell additional units, the price must decrease, which makes MR < P.

Which of the Following Statements Concerning Profit Maximisation for a Monopoly