honeycfa

Monopolists will maximize profit by producing at an output level where which of the following conditions exists?

A) Marginal revenue = marginal cost < price.

B) Price = marginal revenue = marginal cost.

C) Price = demand = marginal revenue = marginal cost.

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To maximize profit, monopolists will expand output until marginal revenue equals marginal cost. Price will be greater than marginal revenue because a monopolist faces a downward sloping demand curve.

honeycfa

A monopolist will expand production until:

A) MR = MC and the price of the product will be determined by the MR curve.

B) MR = MC and the price of the product will be determined by the demand curve.

C) P = MC and the price of the product will be determined by the MC curve.

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A monopolist will expand production until MR = MC. The demand curve lies above the intersection of the MR and MC curve and the price charged is the price on the demand curve for the output where MR = MC.