The profit-maximizing rule for a monopolist is
A) marginal revenue = marginal cost.
B) price = marginal cost.
C) price = marginal revenue.
D) average total cost = marginal revenue.
E) average total cost = marginal cost.

Question

The profit-maximizing rule for a monopolist is
A) marginal revenue = marginal cost.
B) price = marginal cost.
C) price = marginal revenue.
D) average total cost = marginal revenue.
E) average total cost =  marginal cost.

Quizplus · Accepted Answer

The profit-maximizing rule for a monopolist, as for all firms, is to produce at the level where marginal revenue equals marginal cost (MR = MC). This ensures that the last unit produced adds as much to revenue as it does to cost, maximizing profit.

The Profit-Maximizing Rule for a Monopolist Is