Unlike a perfectly competitive firm,a profit-maximizing monopolist
A)can select a price and sell as much as it desires.
B)equates marginal revenue and marginal cost.
C)can produce any desired amount and charge as much as it desires.
D)can choose a price and output combination from a downward-sloping demand curve.

Question

Quizplus · Accepted Answer

A monopolist has the power to choose both the price and the quantity. It can set a higher price and produce a lower quantity or a lower price and a higher quantity, all depending on the market demand. The demand curve for a monopolist is downward-sloping, so it determines the profit-maximizing price and the corresponding output level where marginal revenue equals marginal cost.

Unlike a Perfectly Competitive Firm,a Profit-Maximizing Monopolist