For a monopoly, the socially efficient level of output occurs where
A)marginal revenue equals marginal cost.
B)average revenue equals marginal cost.
C)marginal revenue equals average total cost.
D)average revenue equals average total cost.

Question

Quizplus · Accepted Answer

The socially efficient level of output for a monopoly occurs where average revenue (price) equals marginal cost, as this is the point where the value to consumers (price) equals the cost of producing the last unit, maximizing total welfare.

For a Monopoly, the Socially Efficient Level of Output Occurs