A single- price monopolist will find when it produces its profit- maximising amount of output that
A) price exceeds marginal cost.
B) marginal revenue equals marginal cost.
C) price exceeds marginal revenue.
D) All of the above occur at the profit- maximising output level.

Question

Quizplus · Accepted Answer

At the profit-maximizing output level for a single-price monopolist, all of the conditions listed occur: price exceeds marginal cost because the monopolist has market power to set prices above marginal costs; marginal revenue equals marginal cost as this is the rule for maximizing profit in all types of firms; and price exceeds marginal revenue due to the downward-sloping demand curve that monopolists face, which causes marginal revenue to be less than price.

A Single- Price Monopolist Will Find When It Produces Its