When a monopolist chooses the level of output where marginal cost equals marginal revenue:
A)profits are maximized.
B)price is set at marginal revenue.
C)price is equal to average total costs.
D)All of these statements are true.

Question

Quizplus · Accepted Answer

A monopolist maximizes profits by producing the quantity where marginal cost equals marginal revenue. At this point, the monopolist sets the price based on the demand curve, which is typically above marginal cost and marginal revenue.

When a Monopolist Chooses the Level of Output Where Marginal