Which of the following statements concerning a monopolist is FALSE?
A) A monopolist will produce at which MR = MC.
B) For a monopolist, marginal revenue is less than price.
C) A monopolist will charge the highest price at which any individual will purchase the product.
D) A monopolist will shut down if price is less than average variable cost.

Question

Quizplus · Accepted Answer

A monopolist does not necessarily charge the highest price at which any individual will purchase the product. Instead, they set a price and output level where marginal revenue equals marginal cost to maximize profit, considering the entire market demand curve. Charging the highest price an individual is willing to pay does not account for the overall market demand and could lead to reduced profits due to lower quantities sold.

Which of the Following Statements Concerning a Monopolist Is FALSE