A monopolist that does not price discriminate will set the output level where
A)P = MC
B)P = MR
C)TR = TC
D)MR = MC
E)P = ATC

Question

Quizplus · Accepted Answer

A monopolist maximizes profits at the output level where MR (marginal revenue) = MC (marginal cost). This is because MR represents the change in total revenue from selling one more unit of output, while MC represents the change in total cost from producing one more unit of output. The profit-maximizing output level is where the additional revenue from selling one more unit (MR) is equal to the additional cost of producing one more unit (MC). Therefore, the correct answer is D) MR = MC.

A Monopolist That Does Not Price Discriminate Will Set the Output