Which of the following statements is correct?
A) A monopolist's marginal cost is greater than its price.
B) The more inelastic the demand curve, the greater the monopolist's markup.
C) The monopolist's profit is equal to P(Q - MR).
D) The position of the marginal revenue curve on the y-axis reflects consumer demand elasticity.

Question

Quizplus · Accepted Answer

The more inelastic the demand curve, the greater the monopolist's markup because the monopolist has greater market power to raise prices without losing many sales. Choices A, C, and D are incorrect statements.

Which of the Following Statements Is Correct