Marginal cost must be less than price at a monopolist's profit-maximizing output.

Question

Quizplus · Accepted Answer

This statement is true because a monopolist will produce at the point where marginal revenue equals marginal cost to maximize their profits. If the marginal cost is greater than the price, then the monopolist would be losing money on each additional unit of output produced, and it would not be profitable for them to continue producing. Therefore, the marginal cost must be less than the price at the monopolist's profit-maximizing output.

Marginal Cost Must Be Less Than Price at a Monopolist's