To maximize profits,a monopolist chooses the quantity where
A) revenues are maximized.
B) marginal revenue equals zero.
C) marginal cost equals zero.
D) marginal revenue equals marginal cost.
E) costs are minimized.

Question

Quizplus · Accepted Answer

A monopolist maximizes profits at the quantity where marginal revenue equals marginal cost. This is because at this point, the additional revenue generated from producing one more unit (marginal revenue) is equal to the additional cost incurred in producing that unit (marginal cost), thus maximizing profits.

To Maximize Profits,a Monopolist Chooses the Quantity Where