Figure 15-3
The figure below reflects the cost and revenue structure for a monopoly firm.

-Refer to Figure 15-3.At the profit-maximizing level of output,what occurs at P₃
A)Marginal revenue is equal to P₃.
B)Marginal cost is equal to P₃.
C)Average revenue is equal to P₃.
D)Average cost is equal to P₃.

Question

Figure 15-3
The figure below reflects the cost and revenue structure for a monopoly firm.
 
-Refer to Figure 15-3.At the profit-maximizing level of output,what occurs at P₃
A)Marginal revenue is equal to P₃. 
B)Marginal cost is equal to P₃. 
C)Average revenue is equal to P₃. 
D)Average cost is equal to P₃.

Quizplus · Accepted Answer

At the profit-maximizing level of output, the price (P₃) is equal to the average revenue, as price is typically the same as average revenue in a perfectly competitive market.

Figure 15-3 the Figure Below Reflects the Cost and Revenue Structure for Structure