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8 August, 02:30

In the case of pure monopoly:

a. the firm's profit is maximized at the price and output combination where marginal cost equals marginal revenue

b. one firm is the sole producer of a good or service which has no close substitutes

c. a, b, and c

d. the demand curve is always elastic

e. a and b only

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Answers (1)
  1. 8 August, 03:42
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    e. a and b only

    A and B both statements are correct, because in a monopoly in order to maximize profits a firm will have to produce the amount of output at which its marginal costs = to its marginal revenues, by doing this the firm is able to maximize its profit. Also it is a basic and necessary characteristic of a monopoly that in a pure monopoly only one firm is in the market or industry and is the sole producer.
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Home » Business » In the case of pure monopoly: a. the firm's profit is maximized at the price and output combination where marginal cost equals marginal revenue b. one firm is the sole producer of a good or service which has no close substitutes c. a, b, and c d.
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