Over the short run, you would expect a profit-maximizing monopolist to:
A) evaluate revenues and costs at different levels of output before deciding how much to produce.
B) wait until the going market price moves to a level that is best for it, and then sell as much as it can at that price.
C) follow a price leadership strategy in order to get other firms in the market to set prices that are most beneficial to it.
D) evaluate only its revenues when setting price since there are no other sellers in the market against which costs can be compared.

Question

Quizplus · Accepted Answer

A profit-maximizing monopolist determines its optimal level of output by evaluating revenues and costs at different levels of output. This allows the monopolist to identify the output level at which its profit (the difference between total revenue and total costs) is maximized.

Over the Short Run, You Would Expect a Profit-Maximizing Monopolist