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Which statements would MOST likely be recommended by a monopolist?
A) You should produce the quantity where marginal cost is equal to the market demand and sell it for the fair return's price.
B) You should produce the quantity and offer it for sale at the price set by the demand and supply established by the industry.
C) You should produce the quantity where marginal revenue equals marginal cost and sell it for the price demanded in the market.
D) If possible, you should try to segregate the market and utilize price discrimination in order to increase your producer surplus.
E) You should produce the quantity where your average total cost equals the market demand and sell it for the price where marginal cost equals marginal revenue.

Respuesta :

The statement that would most likely be recommended by a monopolist is E. You should produce the quantity where your average total cost equals the market demand and sell it for the price where marginal cost equals marginal revenue.

A monopolist simply means the only producer in the market. Such a person is the sole producer and therefore fixes a high price since there's no competition and it ensures that more profit is made.

It should be noted that a monopolist will produce the quantity where the average total cost equals the market demand and sell it for the price where marginal cost equals marginal revenue. Here, the price is set above marginal cost, and therefore, the firm earns a positive economic profit.

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Answer: C D

Explanation: USATest Prep 2022

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