Which of the following statements is false?
A)For a monopolist, the law of diminishing marginal returns does not hold.
B)A monopoly firm will earn profit if it produces the quantity of output at which MR = MC, and charges a price that is above its average total cost.
C)The monopolist firm searches for the highest per-unit price it can charge for the quantity of output it produces.
D)The highest per-unit price a monopoly firm can charge is determined by the height of its demand curve.

Question

Quizplus · Accepted Answer

The law of diminishing marginal returns applies to all firms, including monopolies, when it comes to the production process. This law states that as additional units of a variable input (like labor) are added to a fixed input (like capital), the additional output produced from each new unit of the variable input will eventually decrease.

Which of the Following Statements Is False