A profit-maximizing monopolist will produce an output level at which
A) marginal revenue is zero.
B) marginal cost is minimized.
C) price equals marginal cost.
D) marginal revenue equals marginal cost.

Question

Quizplus · Accepted Answer

A profit-maximizing monopolist will produce an output level at which marginal revenue equals marginal cost. This is because the monopolist will continue to produce as long as the marginal revenue received for the last unit produced is greater than or equal to the marginal cost of producing it. Once the two are equal, further production would result in a decrease in profit.

A Profit-Maximizing Monopolist Will Produce an Output Level at Which