In its attempt to maximize profits, a monopoly will:
A) produce a level of output at which marginal revenue is zero.
B) produce a level of output in the inelastic portion of the demand curve.
C) produce a level of output at which marginal revenue is negative.
D) produce a level of output in the elastic portion of the demand curve.

Question

Quizplus · Accepted Answer

A monopoly maximizes profits by producing where marginal revenue equals marginal cost, which occurs in the elastic portion of the demand curve.

In Its Attempt to Maximize Profits, a Monopoly Will