Lowest average cost
Average cost above optimum level of output
Average cost equals marginal cost
Marginal cost much below average cost
Answer is Right!
Answer is Wrong!
The correct answer is C. Average cost equals marginal cost.
A monopoly firm is the only seller of a good or service in a market. It faces the demand curve for its product, which is downward-sloping. The firm maximizes profit by producing the quantity at which marginal revenue equals marginal cost. At this quantity, average cost is equal to marginal cost.
Option A is incorrect because the lowest average cost is achieved at a higher level of output than the profit-maximizing level of output.
Option B is incorrect because average cost is above the optimum level of output.
Option
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