A monopolist will not use marginal cost pricing because at that output
A)MR is greater than MC.
B)MR is below the ATC curve.
C)MC is greater than MR.

Question

Quizplus · Accepted Answer

A monopolist will not use marginal cost pricing because at the output where MC is equal to MR (the profit-maximizing output), MC is greater than MR. Therefore, if a monopolist were to charge a price equal to marginal cost, they would not be able to cover all of their costs and make a profit. Instead, they will choose a price and output combination that will allow them to maximize their profits, which is typically when MR is greater than MC.

A Monopolist Will Not Use Marginal Cost Pricing Because at That