For a monopoly firm, if the profit-maximizing output level is Q and revenue-maximizing output level is R, then

Q=R

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Q<R

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Q>R

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Any of these can be true, depending on the context.

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is B
Q<R

Revenue-maximizing output corresponds to MR=0 and profit-maximizing output corresponds to MR=MC. Since MC>0, MR curve cuts the MC curve first before cutting the quantity axis. Hence, for a monopoly firm, the profit-maximizing output is always less than the revenue-maximizing output or Q<R

Suggest Corrections

Similar questions

The revenue-maximizing level of output for a monopoly firm is 20 units. If the marginal revenue of the first unit sold is Rs 60, what is the maximum total revenue?

If the profit-maximizing output level of a monopoly firm is q=50, the demand curve is p= 20 -0.1q and ATC at the output level of 50 is Rs 7, what is the total profit?

See the MC and MR curves for a firm given below and identify the profit-maximizing level of output.

The profit-maximizing condition for a monopoly firm is ________.

Q. Suppose a firm is producing a level of output such that MR > MC. What should be firm do to maximize its profits?