For a monopolist:
A) price equals average total cost.
B) price is above marginal revenue.
C) marginal revenue equals zero.
D) marginal cost equals zero.

Question

Quizplus · Accepted Answer

A monopolist has market power, which means that they can set their price higher than their marginal revenue (MR) in order to maximize their profits. This is because MR is lower than their price, due to the fact that they must lower the price on all units of a good in order to sell an additional unit. As a result, a monopolist's price is higher than their MR.

For a Monopolist