Exhibit 9.2

-Refer to Exhibit 9.2,which shows the cost and revenue curves faced by a monopolist.At the profit-maximizing output level for the monopolist,_____
A)marginal revenue is zero.
B)marginal revenue is equal to marginal cost.
C)marginal cost is less than marginal revenue.
D)marginal cost is equal to average total cost.
E)price is equal to marginal cost.

Question

Exhibit 9.2
 
-Refer to Exhibit 9.2,which shows the cost and revenue curves faced by a monopolist.At the profit-maximizing output level for the monopolist,_____
A)marginal revenue is zero. 
B)marginal revenue is equal to marginal cost. 
C)marginal cost is less than marginal revenue. 
D)marginal cost is equal to average total cost. 
E)price is equal to marginal cost.

Quizplus · Accepted Answer

At the profit-maximizing output level, the monopolist produces where marginal revenue (MR) equals marginal cost (MC), as long as price is greater than or equal to average variable cost (AVC). In this case, at the profit-maximizing output level, MR intersects MC at point A, which is where the monopolist produces. Therefore, choice B is correct.

Exhibit 9.2 -Refer to Exhibit 9.2,which Shows the Cost and Revenue Curves