A monopolist maximizes profits by producing where which of the following occur?
A)MC = P
B)AC = P
C)MC = MR
D)AC = AR

Question

A monopolist maximizes profits by producing where which of the following occur?
A)MC = P 
B)AC = P 
C)MC = MR 
D)AC = AR

Quizplus · Accepted Answer

A monopolist maximizes profits by producing where marginal revenue (MR) equals marginal cost (MC). This is because MR represents the additional revenue earned from selling one more unit, while MC represents the additional cost of producing one more unit. The profit-maximizing output level is where the additional revenue from selling one more unit (MR) equals the additional cost of producing that unit (MC), as any output level beyond this point would result in lower profit.  Option A and B might not lead to profit maximization because MC and AC may not always be equal to MR or AR. Option D refers to average cost, which is not as relevant to profit maximization as marginal cost.

A Monopolist Maximizes Profits by Producing Where Which of the Following