"Unlike a perfect competitor, a profit-maximizing monopolist produces at an output rate at which marginal revenue exceeds marginal cost." Do you agree or disagree? Why
What will be an ideal response?
Disagree. To maximize profits, the monopolist produces at an output rate at which marginal revenue equals marginal cost as does a perfect competitor. If it goes past that point, then the incremental cost of producing any more units will exceed the incremental revenue and so profits decrease. Below that point, the incremental revenue of producing any more units will exceed the incremental cost and so profits are not maximized either. However, because price is higher than marginal revenue in a monopoly, the profit-maximizing monopolist sells at a price higher than marginal cost.
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Textbook examples of trade between two nations are simplified in order to show how two nations both benefit from trade. These examples are misleading because
A) some individuals in both countries may be made worse off because of trade. B) trade restrictions are likely to be imposed as trade grows over time. C) they do not account for the reduction in wages that occurs in both countries as a result of trade. D) in the real world, rich countries can take advantage of poor countries.
Block pricing
A) is a form of nonlinear price discrimination. B) is pricing where one price is charged for the first block of units purchased, and different prices for subsequent blocks. C) can be either use increasing or decreasing prices for blocks purchased. D) All of the above.