Why Would a Monopolist Never Set a Price on a Point

question 78

Multiple Choice

Why would a monopolist never set a price on a point in the inelastic portion of the demand curve?

• A) Marginal revenue would be negative and therefore well below the marginal cost curve.
• B) The point where marginal revenue equals marginal cost would be below the shutdown point.
• C) The demand curve would be below the average total cost curve.
• D) The monopolist would be operating at a loss.

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