The price charged by a profit-maximizing monopolist occurs
A)At the minimum of the long-run average total cost curve.
B)Where P = MR = MC.
C)At a price on the demand curve above the intersection where MR = MC.
D)At a price on the long-run average total cost curve below the point where MR = MC.

Question

Quizplus · Accepted Answer

Monopolists set prices based on the demand curve, which means they charge a price higher than the marginal cost (MC) at the quantity where marginal revenue (MR) equals MC. This results in a price that is above the point where MR = MC on the demand curve.

The Price Charged by a Profit-Maximizing Monopolist Occurs