How can a monopolist maximise profits?

It is also important to understand how a monopoly can maximize profits.

For monopolies, the best way to maximize profit is to produce at a quantity where marginal revenue equals marginal cost. This is MR = MC. If the monopoly produces a smaller quantity, then MR = MC at those levels. The firm can also make higher profits by increasing output.

How can you maximize your economic profit? The rule of thumb is that profit maximization occurs when the output equals marginal revenue. You can also approach the profit maximization problem from the input side.

Is it possible that a monopolist will always make a profit in this regard?

Monopoly pricing: A firm's marginal revenue will never be below its demand curve. This means that the equilibrium price will always be higher than the marginal cost of equilibrium. The firm thus makes an economic profit. Monopoly Pricing - Monopolies can create higher prices and lower output than perfectly competitive firms.

Which statement applies to a profit-maximizing monopolist who is able to make a profit?

It is subject to a downward-sloping demand curve. 14a A profit-maximizing monopolist will produce at the marginal revenue of zero if it faces a linear demand curve.