Once a monopoly has determined how much it produces,it will charge a price that
A) is determined by the intersection of the marginal cost and average total cost curves.
B) minimizes marginal cost.
C) is determined by its demand curve.
D) is independent of the amount produced.
E) is equal to its average total cost.

Question

Quizplus · Accepted Answer

A monopoly will charge a price determined by its demand curve as it has the ability to influence the market price due to its market power. The intersection of the marginal cost and average total cost curves may not be the profit-maximizing price point for the monopoly. The monopoly may charge a higher price based on the level of demand for its product. The other options are not correct as they do not take into account the market power of the monopoly.

Once a Monopoly Has Determined How Much It Produces,it Will