Which of the following statements is FALSE?
A) Other things being equal, society's overall well-being is reduced when a perfectly competitive industry is monopolized.
B) When both a perfectly competitive industry and a monopolist face the same production costs and the same market demand curve,the monopolist offers a lower level of output for sale.
C) The profit-maximizing monopolist will always produce only along the inelastic portion of the demand curve, whereas equilibrium in a perfectly competitive industry always occurs along the elastic portion of the demand curve.
D) When both a perfectly competitive industry and a monopolist face the same production costs and the same market demand curve, the monopolist charges a higher price for its product than what would be charged in a perfectly competitive situation.

Question

Quizplus · Accepted Answer

The statement that the profit-maximizing monopolist will always produce only along the inelastic portion of the demand curve is false. A monopolist may produce at any point along the demand curve where marginal revenue equals marginal cost, which may include the elastic portion of the demand curve. In contrast, equilibrium in a perfectly competitive industry always occurs along the entire elastic portion of the demand curve. A, B, and D are true statements.

Which of the Following Statements Is FALSE