Examine the figure Monopolist. The graph shows the demand, marginal revenue, mar

Question

Examine the figure Monopolist. The graph shows the demand, marginal revenue, marginal cost, and average total cost for a monopolist. Which statement is false?

a) The quantity that would minimize average total cost is 300 units.

b) The quantity at which price would equal average total cost is 375 units.

c) At the profit-maximizing outcome, a deadweight loss will result.

d) The profit-maximizing point occurs when average total cost equals marginal revenue.

Explanation / Answer

Statement D) happens to be the false statement because the profit maximization point for a monopolist occurs when marginal cost equals marginal revenue not when average total cost equals marginal revenue.

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.