At the profit- maximizing level of output for a single- price monopolist, price

Question

Quizplus · Accepted Answer

A single-price monopolist maximizes profits by producing at the level of output where marginal revenue equals marginal cost. However, the price charged for that level of output will exceed marginal cost. This is because the monopolist faces a downward-sloping demand curve and must lower the price on all units sold in order to sell additional units. Thus, the profit-maximizing price will be higher than the marginal cost at the profit-maximizing quantity.

At the Profit- Maximizing Level of Output for a Single-