To Maximize Profits, a Monopoly Produces at ____ and a Competitive

question 120

Multiple Choice

To maximize profits, a monopoly produces at ____ and a competitive firm produces at ____.

• A)price equal to marginal cost; price equal to marginal cost
• B)price equal to average cost; price equal to marginal cost
• C)marginal revenue greater than marginal cost; price greater than marginal cost
• D)marginal revenue equal to marginal cost; price equal to marginal cost
• E)marginal revenue equal to average revenue; price greater than marginal revenue

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Definitions:

Prime Costs

These are the direct costs of manufacturing a product, including direct materials and direct labor.

Baker's Salaries

Compensation provided to bakers, who are skilled individuals responsible for baking bread, pastries, and other confectioneries.

Indirect Materials

Materials used in the production process that are not directly traceable to the finished product, such as lubricants for machinery.

Fixed Period Cost

Describes expenses that do not fluctuate with the level of production or sales within a certain time frame, such as rent and salaries.