To maximize total surplus with a monopoly firm, a benevolent social planner would choose the level of output where
A)MR = MC.
B)MR intersects the demand curve.
C)MC intersects the demand curve.
D)MR exceeds MC by the greatest amount.

Question

Quizplus · Accepted Answer

To maximize total surplus in a market, a benevolent social planner would aim for the point where marginal cost (MC) intersects the demand curve. This point represents the socially optimal level of output, where the value to consumers (as indicated by the demand curve) equals the cost of producing an additional unit.

To Maximize Total Surplus with a Monopoly Firm, a Benevolent