For a Monopolist to Maximize Profits, Its

question 233

Multiple Choice

For a monopolist to maximize profits, its

• A) price exceeds marginal cost.
• B) price equals marginal revenue.
• C) price equals average total cost.
• D) marginal revenue exceeds price.

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Definitions:

Direct Materials

The raw materials directly traceable to the production of specific goods or services, considered a variable cost.

Period Cost

Expenses that are not directly tied to the production of goods, such as selling, general, and administrative expenses, which are expensed in the period incurred.

Factory Maintenance Equipment

Tools, machinery, and other equipment used for the upkeep of a manufacturing facility.

Company Showroom

is a dedicated space where a business displays its products or prototypes for customers to view, typically used for marketing and sales purposes.