In Monopoly, Output Price Is Greater Than the Marginal Cost

question 112

True/False

In monopoly, output price is greater than the marginal cost of the output; in monopsony, the price of a factor is less than the marginal revenue product of the factor.

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Definitions:

Fixed Cost

A cost that does not change with an increase or decrease in the number of goods or services produced or sold.

Plant

A living organism of the kind exemplified by trees, shrubs, herbs, grasses, ferns, and mosses, typically growing in a permanent site, absorbing water and inorganic substances through its roots, and synthesizing nutrients in its leaves by photosynthesis using the green pigment chlorophyll.

Total Product Curve

A curve that shows the relationship between the quantity of inputs used in production and the quantity of output from production.

Marginal Product Curve

A graph that illustrates the change in output when an additional unit of input is added, holding all other inputs constant.