Which of the following is NOT correct about a single-price monopoly?
A) Marginal revenue is negative when demand is inelastic.
B) To maximise its profit, the firm produces so that marginal revenue equals marginal cost.
C) Maximum profit is found where demand is the most inelastic.
D) Marginal revenue is positive when demand is elastic.
E) To sell more output, the firm must lower its price.

Question

Quizplus · Accepted Answer

Maximum profit for a single-price monopoly is not found where demand is the most inelastic. Instead, a monopoly maximizes profit where marginal revenue equals marginal cost, which typically occurs where demand is elastic, allowing the firm to adjust output and price to maximize profit.

Which of the Following Is NOT Correct About a Single-Price