The table given below shows the price, marginal revenue and marginal cost of a monopolist at different levels of the output. The firm does not incur a fixed cost of production.Table 11.4

-One of the popular myths about monopoly is that:
A)a monopolist is the single seller of a particular commodity.
B)a monopolist can charge any price for his/her good.
C)a monopolist is a price maker.
D)a monopolist may earn positive profits even in the long run.
E)a monopolist faces the market demand curve.

Question

The table given below shows the price, marginal revenue and marginal cost of a monopolist at different levels of the output. The firm does not incur a fixed cost of production.Table 11.4
 
-One of the popular myths about monopoly is that:
A)a monopolist is the single seller of a particular commodity. 
B)a monopolist can charge any price for his/her good. 
C)a monopolist is a price maker. 
D)a monopolist may earn positive profits even in the long run. 
E)a monopolist faces the market demand curve.

Quizplus · Accepted Answer

While a monopolist does have significant control over its pricing due to the lack of competition, it cannot charge any price it wishes. The price is still constrained by the demand curve and consumer willingness to pay.

The Table Given Below Shows the Price, Marginal Revenue and Marginal