Which of the following statements is true?

Question

Quizplus · Accepted Answer

The condition, MC = MR, is the optimal condition for both monopolists and firms in perfectly competitive markets. However, in a monopoly, the profit-maximizing quantity will be where the marginal revenue is equal to marginal cost and the price will be higher than the marginal cost, resulting in positive profits. Therefore, options A, B, and D are incorrect. In a monopoly, the profit maximizing condition is when marginal revenue (MR) equals marginal cost (MC), not when total revenue is maximized (as in a perfectly competitive market). Therefore, statement B is false. Monopoly profits are not necessarily zero, so statement A is false. The demand and marginal revenue curves for a monopoly are not the same; in fact, a monopoly's marginal revenue curve lies below its demand curve, which means that the monopolist must lower their price to sell more units of their product. Therefore, statement D is false.

Which of the Following Statements Is True