To Compute the Optimal Monopoly Price with a Linear Demand

question 62

Multiple Choice

To compute the optimal monopoly price with a linear demand curve, the monopolist:

• A)should set MC = MR, which would determine the optimal quantity and price would equal MC and MR as well.
• B)should set MC = MR, which would determine the optimal quantity and price would be found by inserting the optimal quantity into the monopolist's demand curve.
• C)should set MC = MR, which would determine the optimal quantity and price would be found by doubling the marginal cost.
• D)should set output where total revenue would be the greatest.

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