The margin-minimizing level of output is the price and quantity that a monopolist will produce when it is maximizing profits. This level occurs where marginal revenue equals marginal cost. Profit maximization requires a small enough price to maximize revenues and large enough quantities to minimize costs, which leads to the following equation: Marginal Cost=Marginal Revenue. The profit maximizing level of output maximizes the difference between revenues and costs. The marginal cost curve is a straight line pointing up from left to right on the Y axis, while the marginal revenue curve slopes downward along an X-axis, intersecting it in one point: where they are equal. The margin minimizing level of output occurs when MR=MC. At this price/quantity combination, all consumer surplus has been converted into producer surplus (also called profits). In other words, at this point there is no more potential for any additional increase in total welfare by changing either price or quantity. Marginal Cost equals Marginal Revenue because MC = -MR*P; hence P=(marginal cost)/(marginal revenue)=$MC

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