Which of the following is a characteristic of a single-price monopoly?
A)Many substitutes for the firm's product exist.
B)Price exceeds marginal revenue.
C)Demand is perfectly elastic.
D)The firm is a price taker.
E)Marginal revenue is greater than marginal cost.

Question

Quizplus · Accepted Answer

In a single-price monopoly, the firm has market power and can set its price above marginal cost. However, the firm still faces a downward sloping demand curve, so it must lower the price to sell more units. As a result, marginal revenue is less than the price for each additional unit sold. Therefore, in a single-price monopoly, price exceeds marginal revenue (option B).

Which of the Following Is a Characteristic of a Single-Price