A monopoly chooses to supply the market with a quantity of a product that is determined by the intersection of the
A)marginal cost and demand curves.
B)average total cost and demand curves.
C)marginal revenue and average total cost curves.
D)marginal revenue and marginal cost curves.

Question

Quizplus · Accepted Answer

To maximize profits, a monopoly will produce where its marginal revenue (MR) equals its marginal cost (MC), which is the output level where the firm earns the highest profit. Hence, the quantity of the product that a monopoly chooses to supply is determined by the intersection of its marginal revenue and marginal cost curves.

A Monopoly Chooses to Supply the Market with a Quantity