For a profit-maximizing monopolist, the price of a product is:
A)always equal to marginal revenue.
B)always greater than marginal revenue.
C)always less than marginal revenue.
D)always equal to the average total cost of production.
E)always greater than the average total cost of production.

Question

Quizplus · Accepted Answer

For a monopolist, the price is always greater than marginal revenue because the monopolist faces a downward-sloping demand curve, meaning they must lower the price to sell additional units, causing marginal revenue to be less than the price.

For a Profit-Maximizing Monopolist, the Price of a Product Is