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. Please see the encircled part of the image.

 

To add, monopoly is the market situation where one producer (or a group of producers acting in concert) controls supply of a good or service, and where the entry of new producers is prevented or highly restricted. 

Answer 2

The monopoly sets its output at the point where its marginal cost becomes equal to marginal revenue.

A monopoly structure represents a market that comprises a large number of buyers that are having a single seller to purchase goods from. It gives them an incentive to charge higher prices as they have the power to control the supply of products in the market.

The monopoly aims at profit maximization which is determined by equating the marginal cost with marginal revenue. It thereby gives the monopoly their equilibrium output (Q) and price (P) in the market.

Hence, the firms would try to produce products till the point marginal revenue would be more or above the marginal cost.

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