In terms of pricing,which of the following is not true for a monopolist?
A) In the long-run economic profit is impossible.
B) Marginal revenue is always less then the price charged.
C) If marginal revenue is greater then marginal cost increasing output will increase profits (decrease loss).
D) Maximum profit (minimum loss)occurs where marginal revenue equals marginal cost.

Question

Quizplus · Accepted Answer

Monopolists can earn long-run economic profits due to their ability to restrict output and charge higher prices than in competitive markets. However, the rest of the statements are true for a monopolist. Marginal revenue is always less than the price charged because the monopolist has market power and must reduce the price on all units to sell another unit. Increasing output will increase profits as long as marginal revenue exceeds marginal cost, and maximum profit occurs where marginal revenue equals marginal cost.

In Terms of Pricing,which of the Following Is Not True