To maximize total surplus with a monopoly firm,a benevolent social planner would
A) choose the level of output where MR = MC.
B) choose the level of output where MR intersects the demand curve.
C) choose the level of output where MC intersects the demand curve.
D) allow the free market system to determine the level of output.

Question

Quizplus · Accepted Answer

To maximize total surplus, a benevolent social planner would choose the level of output where the marginal cost (MC) intersects the demand curve, as this is the point where the value to consumers equals the cost of production, leading to an efficient allocation of resources.

To Maximize Total Surplus with a Monopoly Firm,a Benevolent Social