question archive A monopolist maximizes profit by producing an output level where marginal cost equals price
A monopolist maximizes profit by producing an output level where marginal cost equals price
Subject:MarketingPrice:2.88 Bought3
A monopolist maximizes profit by producing an output level where marginal cost equals price.
a. True
b. False
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
Answer: False
A monopoly maximizes profit at the level of output where marginal cost equals marginal revenue. Since it is a monopoly, the marginal revenue is almost always lower than price since a monopoly can artificially limit supply to boost prices and thus profit. This results in less output being created than if a monopoly operated where marginal cost equaled price. The answer is thus false.
