What is true at the profit-maximizing quantity for a nondiscriminating monopolist but not true of a perfectly competitive firm?
A)Price equals marginal cost.
B)Price is greater than marginal cost.
C)Marginal revenue equals marginal cost.
D)Marginal revenue is less than marginal cost.
E)Marginal revenue is greater than average revenue.

Question

Quizplus · Accepted Answer

A monopolist can set a price higher than marginal cost to maximize profits, while a perfectly competitive firm cannot due to the prevalence of competition driving prices down to equal marginal cost. Therefore, only choice B is true for a non-discriminating monopolist but not true of a perfectly competitive firm.

What Is True at the Profit-Maximizing Quantity for a Nondiscriminating