To maximise profit a monopolist will produce where

Question

Quizplus · Accepted Answer

A monopolist will aim to maximise profit by producing where marginal revenue (MR) is equal to marginal cost (MC) as this is where the additional revenue generated from producing one more unit equals the additional cost incurred from producing that unit. At this point, the monopolist will be producing the optimal level of output that allows them to maximise their profit. Choices B, C, and D are not correct because a monopolist does not base their production decisions on unit-elastic demand, revenue per unit, or average total cost compared to average revenue.

To Maximise Profit a Monopolist Will Produce Where