If a monopoly is maximizing profits,
A)price will always be greater than the elasticity of demand.
B)price will always equal marginal cost.
C)price will always be greater than marginal cost.
D)price will always equal marginal revenue.

Question

Quizplus · Accepted Answer

A monopolist maximizes profit at the output level where marginal revenue equals marginal cost. However, the monopolist charges a price based on the demand curve, which means that the price will be greater than the marginal cost. Therefore, the correct choice is C, price will always be greater than marginal cost.

If a Monopoly Is Maximizing Profits