If a Profit Maximizing Monopolist Faces a Linear Demand Curve

question 3

Multiple Choice

If a profit maximizing monopolist faces a linear demand curve and has zero marginal cost, it will produce at:

• A)lowest point of marginal revenue curve
• B)elasticity of demand equals 1
• C)lowest point of marginal profit curve
• D)all of the choices are correct

---

Definitions:

Monthly Expenses

Regular costs incurred every month, such as rent, utilities, and groceries, necessary for maintaining a standard of living.

Contribution Margin

The amount by which a product's sales revenue exceeds its variable costs, used to cover fixed costs and contribute to profits.

Unit Selling Price

The cost at which a single unit of product is sold to customers, important for determining pricing strategies and profitability.

Unit Variable Cost

The cost associated with producing one additional unit of a product.