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.

---

Definitions:

Standard Costs

The predetermined expenses for the production of a product or operation of a service, used as a baseline to measure performance.

Direct Labor Wage Variance

The difference between the expected cost of direct labor for production and the actual cost incurred.

Direct Labor Efficiency Variance

The difference between the actual hours worked and the standard hours expected, multiplied by the standard labor rate.