A monopolist maximizes its profits by selling up to the point
Where:
A)its price equals its marginal cost.
B)its price equals its marginal revenue.
C)its marginal revenue equals its marginal costs.
D)the difference between its price and average cost is maximized.

Question

Quizplus · Accepted Answer

A monopolist maximizes its profits by producing up to the point where marginal revenue (MR) equals marginal cost (MC). At this point, the monopolist can sell an additional unit of output without affecting the price and the additional revenue gained from selling that unit will exceed the additional cost of producing it. So, the monopolist will keep producing until MR=MC for maximum profit.

A Monopolist Maximizes Its Profits by Selling Up to the Point