A monopolist who is maximizing profits produces to the point at which
A) marginal cost and average total cost are equal.
B) price, marginal cost and average variable cost are equal.
C) price is greater than marginal cost.
D) price is greater than average total cost.

Question

Quizplus · Accepted Answer

A monopolist maximizes profits by producing at the quantity where marginal revenue equals marginal cost, which typically results in a price that is greater than marginal cost because the monopolist has market power and faces a downward-sloping demand curve.

A Monopolist Who Is Maximizing Profits Produces to the Point