The Monopolist and the Perfectly Competitive Firm Both Maximize Profits

question 144

Multiple Choice

The monopolist and the perfectly competitive firm both maximize profits by choosing to produce at the level of output where:

• A)marginal cost equals marginal revenue, and price is equal to minimum average total cost.
• B)marginal cost intersects demand, and the price is determined by this intersection.
• C)marginal cost equals marginal revenue, and price is equal to average revenue.
• D)marginal cost equals average revenue, and price is equal to minimum average total cost.

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Definitions:

C Corporation

A legal structure for corporations in the U.S. where the owners are taxed separately from the entity, providing limited liability protection.

Partnership

A business structure where two or more individuals share ownership, profits, and responsibilities for managing the enterprise.

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