Which of the following does NOT describe a profit-maximizing monopolist?
A) The monopolist chooses output where marginal revenue equals marginal cost.
B) The monopolist charges a price that exceeds marginal cost.
C) The monopolist faces a perfectly elastic demand curve.
D) The monopolist can potentially continue to earn economic profits in the long run.

Question

Quizplus · Accepted Answer

A monopolist faces a downward sloping demand curve, meaning that in order to sell more output, it must lower its price. Therefore, the demand curve faced by a monopolist is never perfectly elastic.

Which of the Following Does NOT Describe a Profit-Maximizing Monopolist