Question on: JAMB Economics - 2002
The short-run equilibrium output for a monopolist is determined by the?
A
highest point on the total revenue curve
B
minimum point on the average revenue and the average cost curve
C
intersection of the average revenue and the average cost curves
D
intersection of the marginal cost and marginal revenue curves
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Correct Option: C
The short-run equilibrium output for a monopolist is determined by the intersection of the marginal cost (MC) and marginal revenue (MR) curves.
- A monopolist maximizes profit where marginal cost equals marginal revenue (MC = MR).
- At this point, the monopolist decides on the quantity to produce. The price is determined by the demand curve at that quantity.
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