When is a monopolist's total revenue at a maximum?
A)When it is equal to its marginal revenue.
B)When it is equal to its average revenue.
C)When its marginal revenue is equal to zero.
D)When its average revenue is equal to its marginal revenue.
E)When its marginal revenue is at a maximum.

Question

Quizplus · Accepted Answer

Total revenue for a monopolist is at a maximum when its marginal revenue is equal to zero. This is because marginal revenue is the additional revenue gained from selling one more unit. When marginal revenue is zero, selling additional units does not increase total revenue, indicating a maximum point.

When Is a Monopolist's Total Revenue at a Maximum