When a Monopolist Chooses to Produce at the Level of Output

question 43

Multiple Choice

When a monopolist chooses to produce at the level of output where marginal cost equals marginal revenue:

• A)profits are maximized.
• B)price is equal to marginal revenue.
• C)price is equal to average total costs.
• D)total revenue is maximized.

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Definitions:

Optimal Number

The most efficient, effective, or desirable number in terms of outcome or utility.

Education Level

A measure of the highest level of schooling or training a person has received, often used as an indicator of workforce skill and economic potential.

Degree of Substitutability

The extent to which one good can replace another in consumption or production, impacting competitive market dynamics.