A monopolist will operate at the quantity where:
A) MR = MC and charge a price equal to marginal revenue.
B) MR = MC and charge a price equal to average variable cost.
C) MR = MC and charge a price corresponding to demand at that level.
D) MR = MC and charge a price corresponding to average total cost at that level.

Question

Quizplus · Accepted Answer

A monopolist maximizes profit by producing the quantity where marginal revenue (MR) equals marginal cost (MC) and then charges the price that consumers are willing to pay for that quantity, which is found on the demand curve.

A Monopolist Will Operate at the Quantity Where