Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
To maximize profit
B
To minimize costs
C
To increase competition
D
To achieve product differentiation
Understanding the Answer
Let's break down why this is correct
Answer
The primary goal of a monopolist when determining output levels is to maximize profits. A monopolist is a single seller in the market, so they have control over the price of their product. To find the best output level, the monopolist looks for the point where the difference between total revenue (the money made from selling) and total costs (the expenses of production) is the largest. For example, if a monopolist sells 100 units of a product for $10 each, their total revenue is $1,000. They will adjust the number of units sold until they find the output level that gives them the highest profit, considering both the price they can charge and the costs of making the product.
Detailed Explanation
A monopolist wants to make the most money possible. Other options are incorrect because Some might think a monopolist focuses on cutting costs; People might believe that a monopolist wants to create more competition.
Key Concepts
monopoly definition
Topic
Monopoly Output Levels
Difficulty
easy level question
Cognitive Level
understand
Ready to Master More Topics?
Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.