If a monopolist is producing a quantity that generates MC = MR,then profit:

A) is maximized.
B) is maximized only if MC = P.
C) can be increased by increasing production.
D) can be increased by decreasing production.

Question

MOYAWALA ARBAZ · Accepted Answer

Final Answer : A, Explanation :  When a monopolist is producing a quantity where the marginal cost (MC) equals the marginal revenue (MR), they have reached their profit-maximizing level of production. At this level, the monopolist is producing the quantity where the highest possible profit can be made. Therefore, answer A, profit is maximized, is the correct choice. Answers B, C, and D are incorrect as they do not result in the highest possible profit for the monopolist.

If a monopolist is producing a quantity that generates MC = MR,then profit:

A) is maximized.
B) is maximized only if MC = P.
C) can be increased by increasing production.
D) can be increased by decreasing production.

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Learning Objectives

Related questions

If a monopolist is producing a quantity that generates MC = MR,then profit:A) is maximized.B) is maximized only if MC = P.C) can be increased by increasing production.D) can be increased by decreasing production.

Definitions

Learning Objectives

Learning Objectives

Related questions

If a monopolist is producing a quantity that generates MC = MR,then profit:

A) is maximized.
B) is maximized only if MC = P.
C) can be increased by increasing production.
D) can be increased by decreasing production.