To maximize profit a monopolist will produce where
A)marginal revenue is equal to marginal cost.
B)demand for its product is unit elastic.
C)revenue per unit is maximized.
D)average total cost is equal to average revenue.

Question

Quizplus · Accepted Answer

A monopolist will maximize profit where marginal revenue equals marginal cost. At this point, the additional revenue earned from selling one more unit of the product equals the additional cost incurred in producing that unit. This ensures that the monopolist is producing the optimal level of output, where the marginal benefit of producing an additional unit is equal to the marginal cost of producing it.

To Maximize Profit a Monopolist Will Produce Where