When oligopolies seek to operate as a single-price monopoly,the firms produce at the point where
A) P = MC.
B) MR = MC.
C) P

Question

When oligopolies seek to operate as a single-price monopoly,the firms produce at the point where
A) P = MC.
B) MR = MC.
C) P < ATC.
D) P = MR.
E) MC = ATC.

Quizplus · Accepted Answer

When oligopolies seek to operate as a single-price monopoly, they maximize profits by producing at the point where marginal revenue (MR) equals marginal cost (MC) because this is where additional units sold bring in just enough revenue to cover the additional cost of producing them, resulting in the highest possible profit. Therefore, the answer is B, MR=MC.

When Oligopolies Seek to Operate as a Single-Price Monopoly,the Firms