Which of the following is (are) true?
A) A profit-maximizing monopoly firm will select a price and quantity in the inelastic range of its demand curve.
B) A profit-maximizing monopoly firm will select a price and quantity in the elastic range of its demand curve.
C) Any firm will maximize profits by producing the quantity of output where MR MC.
D) B and C are true.

Question

Which of the following is (are) true?
A) A profit-maximizing monopoly firm will select a price and quantity in the inelastic range of its demand curve.
B) A profit-maximizing monopoly firm will select a price and quantity in the elastic range of its demand curve.
C) Any firm will maximize profits by producing the quantity of output where MR > MC.
D) B and C are true.

Quizplus · Accepted Answer

A profit-maximizing monopoly firm will select a price and quantity in the elastic range of its demand curve because this is where marginal revenue (MR) is positive and can equal marginal cost (MC) for profit maximization.

Which of the Following Is (Are) True