A monopolist will try to operate at A. At the highest price on the demand curve

Question

A monopolist will try to operate at A. At the highest price on the demand curve B where average revenue equals marginal revenue C. In the inelastic range of the demand curve D. Where marginal costs equals marginal revenue A monopolist will try to operate at A. At the highest price on the demand curve B where average revenue equals marginal revenue C. In the inelastic range of the demand curve D. Where marginal costs equals marginal revenue A. At the highest price on the demand curve B where average revenue equals marginal revenue C. In the inelastic range of the demand curve D. Where marginal costs equals marginal revenue

Explanation / Answer

Answer

D. Where marginal costs equal marginal revenue

The monopolist operates at MR=MC where profit is maximum because marginal profit is zero, the marginal profit=MR-MC.

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