Which of the following is not generally true about a profit-maximizing monopolist?
A) The monopolist faces a perfectly elastic demand curve.
B) The monopolist can potentially continue to earn economic profits in the long run.
C) The monopolist charges a price that exceeds marginal cost.
D) The monopolist chooses output where marginal revenue equals marginal cost.

Question

Quizplus · Accepted Answer

A profit-maximizing monopolist faces a downward-sloping demand curve, which means that they cannot produce an additional unit without reducing the price of all the units sold. Therefore, the demand curve is generally not perfectly elastic.

Which of the Following Is Not Generally True About a Profit-Maximizing