Question

Indicate the point where a monopoly will set its output.

Answer 1

The point where a monopoly will set its output is where marginal cost is equal to marginal revenue.

Answer 2

The point where a monopoly will set its output is where the marginal cost is equal to marginal revenue.

A monopoly´s goal is to maximize profit. Having no competition, the price level and the quantity demanded can be set. The output that maximizes a monopoly's profit is calculated by equating its marginal cost to its marginal revenue.