A Monopolist Sets the Price Where Marginal Costs Equal Marginal

question 34

Multiple Choice

A monopolist sets the price where marginal costs equal marginal revenue and the price is higher than the competitive level. Since there are some consumers who are willing to pay more than the marginal cost of production, then:

• A) there are gains to be made from more trade.
• B) all gains from trade are exhausted.
• C) it is clear that monopolists do not maximize profits.
• D) it is clear that monopolists do make profits.

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