A monopoly
A)Maximizes profits at the output level where MR MC.
B)Produces less output than a competitive industry,ceteris paribus.
C)Charges the same price as a competitive industry,ceteris paribus.
D)Maximizes profits at the output where P = MR.

Question

A monopoly
A)Maximizes profits at the output level where MR > MC.
B)Produces less output than a competitive industry,ceteris paribus.
C)Charges the same price as a competitive industry,ceteris paribus.
D)Maximizes profits at the output where P = MR.

Quizplus · Accepted Answer

A monopoly produces less output than a competitive industry, ceteris paribus, because it restricts output to raise prices and increase profits, unlike competitive markets where firms produce where price equals marginal cost.

A Monopoly