Question

In: Economics

The monopolist determines the price and quantity combination that maximizes​ short-run profits by A. finding the...

The monopolist determines the price and quantity combination that maximizes​ short-run profits by

A.

finding the quantity at which marginal cost and marginal revenue are equal and then using the demand curve to find price.

B.

finding the quantity at which average revenue and average total cost are furthest apart.

C.

finding the point at which marginal revenue and demand intersect. This gives the price and quantity that maximizes profits.

D.

determining the price by finding the highest price at which sales can be made and then using the demand curve to find the appropriate quantity.

Solutions

Expert Solution

The monopolist determines the price and quantity combination that maximizes short run profit by finding the quantity at which margnal cost and marginal revenue are equal and then using the demand curve to find the price.

Answer: option (a).


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