Which of the following is not generally true about a profit-maximizing monopolist?
A)A profit-maximizing monopolist chooses an output level where average revenue equals marginal cost.
B)A profit-maximizing monopolist can potentially continue to earn economic profits in the long run.
C)A profit-maximizing monopolist charges a price that exceeds marginal cost.
D)A profit-maximizing monopolist chooses an output level where marginal revenue equals marginal cost.
E)A profit-maximizing monopolist faces no competition from rival firms as there are barriers to entry.

Question

Quizplus · Accepted Answer

A profit-maximizing monopolist does not necessarily choose an output level where average revenue equals marginal cost. Instead, it chooses an output level where marginal revenue equals marginal cost, which may lead to a price that exceeds marginal cost.

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