The profit maximizing output level for a monopolist is
A)the output level where price elasticity of demand is ?1 and total revenue is maximized
B)the output level where price elasticity of demand is +1 and total revenue is maximized
C)the output level where marginal revenue equals marginal cost
D)where the difference between price and average total cost is the largest

Question

Quizplus · Accepted Answer

The profit-maximizing output level for a monopolist is where marginal revenue (MR) equals marginal cost (MC). This is because at this point, any additional unit produced would cost more than it would bring in revenue, reducing profits.

The Profit Maximizing Output Level for a Monopolist Is