If a monopoly is producing at a level of production at which profits are maximized, then:
A) price is greater than marginal cost.
B) price is equal to marginal cost.
C) price is greater than average total cost.
D) price is less than marginal cost.

Question

Quizplus · Accepted Answer

In a monopoly, profit maximization occurs where marginal cost equals marginal revenue, and since the demand curve is downward sloping, the price is greater than marginal cost.

If a Monopoly Is Producing at a Level of Production