When marginal revenue intersects marginal cost on a graph:
A) profits are maximized for a monopoly but not for a competitive firm.
B) profits are maximized for a competitive firm but not for a monopoly.
C) a monopolist prices the good at that point.
D) a monopolist always makes an economic profit.
E) a monopolist must go up to the demand curve to find the price.

Question

Quizplus · Accepted Answer

When marginal revenue intersects marginal cost, a monopolist determines the quantity to produce. To find the price, the monopolist must go up to the demand curve, as the demand curve shows the highest price consumers are willing to pay for that quantity.

When Marginal Revenue Intersects Marginal Cost on a Graph