A monopolist finds the price-output combination that maximizes its profits by
A) equating total revenue and total cost.
B) equating marginal revenue and marginal cost.
C) finding the combination for which the difference between marginal revenue and marginal cost is the greatest.
D) equating price and marginal cost.
B
You might also like to view...
As more firms are attracted to an industry, the supply curve can be expected to shift to the right.
Answer the following statement true (T) or false (F)
How do the characteristics of perfect competition and monopolistic competition differ?
What will be an ideal response?
In a zero-sum game
a. all players receive a $0 payoff b. all players can simultaneously win c. the gains to the winners equal the losses of the losers d. none of the above
Suppose the economy is operating below potential output. If policy makers try to avoid a budget deficit by raising taxes or reducing government spending, these actions would:
A. increase inflation. B. help pull an economy out of a depression. C. make a recession worse. D. negate the multiplier effect.