To find the quantity chosen by a monopolist, find the point at which marginal revenue equals _____.

• A. average revenue
• B. marginal cost
• C. average total cost
• D. total cost

Answer: (B)

Verified step by step guidance

1. Understand that a monopolist maximizes profit by choosing the quantity where marginal revenue (MR) equals marginal cost (MC).
2. Recall that marginal revenue is the additional revenue gained from selling one more unit of output, while marginal cost is the additional cost of producing one more unit.
3. Set up the equality: \(\text{MR} = \text{MC}\), which is the condition for profit maximization in monopoly.
4. Recognize that average revenue (AR) equals price in monopoly, but the profit-maximizing quantity is not found where MR equals AR.
5. Conclude that the correct point to find the monopolist's chosen quantity is where marginal revenue equals marginal cost.