For a monopolist, at the profit-maximizing level of output:
A)price is greater than average revenue.
B)average revenue is greater than marginal cost.
C)marginal cost is greater than price.
D)total revenue is equal to total cost.

Question

Quizplus · Accepted Answer

For a monopolist, the profit-maximizing level of output is where marginal revenue equals marginal cost. Since price (or average revenue) is above marginal cost at this point (due to the downward-sloping demand curve), option B is correct.

For a Monopolist, at the Profit-Maximizing Level of Output