In maximizing profits, a single-price monopolist will charge a price that is
A)less than marginal cost.
B)equal to marginal cost.
C)greater than marginal cost.
D)There is not enough information to answer the question.

Question

Quizplus · Accepted Answer

A single-price monopolist maximizes profits by producing at a level where marginal revenue equals marginal cost, but they will charge a price on the demand curve that is higher than the marginal cost. This is because monopolists have market power that allows them to set prices above marginal costs, unlike in perfect competition where price equals marginal cost.

In Maximizing Profits, a Single-Price Monopolist Will Charge a Price