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Assume that Bridget’s Brownies is the only bakery in an entire region, making it a monopoly.

Which of the following statements would accurately explain her pursuit of maximum profits?

A

Bridget will maximize profit by producing at that point on the demand curve where elasticity is zero.

B

Bridget will maximize profits by producing that output at which the difference between price and average total cost is the greatest.

C

By producing at the profit-maximizing output level, Bridget will under-allocate resources to the production of her product

D

Bridget will maximize profits by producing at the point where marginal revenue is zero

E

Bridget will earn only normal profits in the long run

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