If a monopolist has zero marginal costs, it will produce
A)the output at which total revenue is maximized.
B)in the range in which marginal revenue is still increasing.
C)at the point at which marginal revenue is at a maximum.
D)in the range in which marginal revenue is negative.

Question

Quizplus · Accepted Answer

If a monopolist has zero marginal costs, it means that there are no additional costs incurred when producing additional units of output. Therefore, the monopolist should continue to produce until the point where total revenue is maximized, as producing an additional unit of output will not result in any additional costs.

If a Monopolist Has Zero Marginal Costs, It Will Produce