The first-order conditions for a monopoly to maximize profits are:
A) dR(Q)/dQ = dC(Q)/dQ.
B) MR(Q) = MC(Q).
C) dπ(Q)/dQ = 0.
D) All of the statements associated with this question are correct.

Question

Quizplus · Accepted Answer

The first-order conditions for profit maximization in a monopoly are that marginal revenue (MR) equals marginal cost (MC), which is represented by B. This is derived from setting the derivative of profit (π) with respect to quantity (Q) to zero, as in C. A is another way of expressing MR = MC, since dR(Q)/dQ is MR and dC(Q)/dQ is MC. Therefore, all statements are correct.

The First-Order Conditions for a Monopoly to Maximize Profits Are