Which of the following is true about where a profit-maximizing monopoly will produce on a linear demand curve when it has positive marginal costs?
A) It will produce output on the inelastic portion of the demand curve.
B) It will produce output where MR

Question

Which of the following is true about where a profit-maximizing monopoly will produce on a linear demand curve when it has positive marginal costs?
A) It will produce output on the inelastic portion of the demand curve.
B) It will produce output where MR < 0.
C) It will produce output where MR = 0.
D) It will produce output on the elastic portion of the demand curve.

Quizplus · Accepted Answer

A profit-maximizing monopoly will produce where marginal revenue (MR) equals marginal cost (MC). On a linear demand curve, this occurs on the elastic portion of the demand curve, where MR is positive.

Which of the Following Is True About Where a Profit-Maximizing