For a monopoly ﬁrm, the price established at the optimal level of output exceeds the marginal cost of the resources used.

Name: For a monopoly ﬁrm, the price established at the optimal level of output exceeds the marginal cost of the resources used.
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Question

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A monopoly firm has the power to set the price at a level higher than the marginal cost in order to maximize profits. This is because there are no close substitutes available in the market and the firm faces no competition.

For a Monopoly ﬁRm, the Price Established at the Optimal