The monopolist's profit-maximizing quantity of output is determined by the intersection of which of the following two curves?
A)Marginal cost and demand
B)Marginal cost and marginal revenue
C)Average total cost and marginal revenue
D)Average variable cost and average revenue

Question

Quizplus · Accepted Answer

The monopolist's profit-maximizing quantity of output is determined by the intersection of marginal cost (MC) and marginal revenue (MR) curves. This is because at the profit-maximizing quantity of output, the marginal revenue earned by the last unit sold is equal to the marginal cost of producing that unit. This condition ensures that the monopolist is not producing units that cost more to produce than the revenue generated from selling them, which would reduce their profits. Therefore, the answer is B - marginal cost and marginal revenue.

The Monopolist's Profit-Maximizing Quantity of Output Is Determined by the Intersection