A monopolist maximizes profits by producing where which of the following occurs?
A)MC = P.
B)AC = P.
C)MC = MR.
D)AC = AR.

Question

Quizplus · Accepted Answer

A monopolist maximizes profits by producing where marginal revenue (MR) is equal to marginal cost (MC). This is because MR is the additional revenue gained from producing one more unit, while MC is the additional cost of producing that unit. By producing where MR=MC, the monopolist ensures that the revenue gained from producing one more unit is greater than or equal to the cost of producing that unit, resulting in an increase in profit.

A Monopolist Maximizes Profits by Producing Where Which of the Following