For a profit-maximizing monopolist,price exceeds marginal cost at all times.

Name: For a profit-maximizing monopolist,price exceeds marginal cost at all times.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A monopolist maximizes profits by setting its output level where marginal revenue equals marginal cost. However, since it has market power, it can charge a price higher than its marginal cost to achieve greater profits. Therefore, price will always exceed marginal cost for a profit-maximizing monopolist.

For a Profit-Maximizing Monopolist,price Exceeds Marginal Cost at All Times