The profit-maximizing output level for a monopolist is where the:
A) price is maximized.
B) output sold is maximized.
C) ATC curve is minimized.
D) maximum efficiency is achieved.
E) MR = MC.

Question

Quizplus · Accepted Answer

The profit-maximizing output level for a monopolist is where marginal revenue (MR) equals marginal cost (MC), because at this point the monopolist is producing the quantity that generates the most profit. This is because MR represents the additional revenue generated from selling one more unit of output, while MC represents the additional cost of producing one more unit of output. Therefore, if MR is greater than MC, the monopolist should produce more, and if MC is greater than MR, the monopolist should produce less, until they are equal, at which point profits are maximized.

The Profit-Maximizing Output Level for a Monopolist Is Where The