In a successive monopoly structure, the profit- maximizing wholesale price is equal to the difference between the and the of distribution.
A)marginal revenue; marginal cost
B)wholesale demand; marginal cost
C)retail demand; marginal revenue
D)wholesale demand; marginal revenue

Question

Quizplus · Accepted Answer

In a successive monopoly structure, the profit-maximizing wholesale price is determined by the difference between the marginal revenue and the marginal cost. This is because the monopolist aims to maximize profits by producing up to the point where the additional revenue from selling one more unit (marginal revenue) equals the additional cost of producing that unit (marginal cost).

In a Successive Monopoly Structure, the Profit- Maximizing Wholesale Price