For a monopoly to maximize profits, price must exceed marginal cost.

Name: For a monopoly to maximize profits, price must exceed marginal cost.
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Question

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In a monopoly, the firm has the power to set the price above the marginal cost because it has no close competition. The profit-maximizing output occurs where marginal revenue equals marginal cost, but the price charged is higher than the marginal cost. Therefore, for a monopoly to maximize profits, price must exceed marginal cost.

For a Monopoly to Maximize Profits, Price Must Exceed Marginal