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Economics (AS & A Level) · May / June 2021 · Paper 32 · Question 6

9708Differing objectives and policies of firms

Which statement about a monopoly is correct?

  1. AProfit maximisation occurs when average cost equals average revenue.
  2. BSales maximisation occurs when marginal cost equals marginal revenue.
  3. CSales revenue maximisation occurs when marginal revenue is equal to zero.
  4. DSatisficing occurs when marginal cost is equal to zero.

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Correct answer: C. Sales revenue maximisation occurs when marginal revenue is equal to zero.

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