Which of the following is true at the profit-maximizing quantity for both a perfectly competitive firm and a monopoly?
A)Price equals marginal cost.
B)Price is greater than marginal cost.
C)Marginal revenue equals marginal cost.
D)Marginal revenue is less than marginal cost.
E)Marginal revenue is greater than average revenue.

Question

Quizplus · Accepted Answer

At the profit-maximizing quantity, both a perfectly competitive firm and a monopoly will produce where marginal revenue equals marginal cost. However, in a perfectly competitive market, this also means that price equals marginal cost. In a monopoly, price is typically greater than marginal cost.

Which of the Following Is True at the Profit-Maximizing Quantity