The Price-Output Combination That Maximizes Profits for a Monopolist Occurs

question 41

Multiple Choice

The price-output combination that maximizes profits for a monopolist occurs at the point where

• A) total revenues and total costs are equal.
• B) the difference between total revenues and total costs is the greatest.
• C) total revenues are the greatest.
• D) the elasticity of demand equals one.

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Definitions:

Yield To Maturity

A bond's expected rate of return if held until its maturity date, calculated based on its current market price, coupon rate, and time to maturity.

Par Value

The nominal or face value of a bond, share of stock, or other financial instrument, set by the issuing company at the time of issue.

Coupon Bond

A debt security issued by corporations or governments that pays periodic interest payments based on a fixed interest rate until the bond reaches its maturity date, at which point the principal is repaid.

Par Value

The face value of a bond or stock as stated by the issuing company, which does not necessarily match the market value.