Which of the following is NOT correct about a single-price monopoly?
A) Maximum profit is found where demand is the most inelastic.
B) Marginal revenue is negative when demand is inelastic.
C) Marginal revenue is positive when demand is elastic.
D) To sell more output, the firm must lower its price.
E) To maximize its profit, the firm produces so that marginal revenue equals marginal cost.

Question

Quizplus · Accepted Answer

Maximum profit for a single-price monopoly is not found where demand is the most inelastic. Instead, a monopoly maximizes profit where marginal revenue equals marginal cost, regardless of the elasticity of demand at that point.

Which of the Following Is NOT Correct About a Single-Price