A pure monopolist's short-run profit-maximizing or loss-minimizing position is such that price
A)equals marginal revenue.
B)will vertically intersect demand where MR = MC.
C)will always equal ATC.
D)always exceeds ATC.

Question

Quizplus · Accepted Answer

A pure monopolist maximizes profit or minimizes loss in the short run by producing at the quantity where marginal revenue (MR) equals marginal cost (MC). The price is then determined by the demand curve at this quantity, not by the equality of price and marginal revenue or the relationship between price and average total cost (ATC).

A Pure Monopolist's Short-Run Profit-Maximizing or Loss-Minimizing Position Is Such