Do you agree or disagree with the statement that: “A monopolist always charges the highest possible price.” Explain

What will be an ideal response?

Disagree. The pure monopolist has a down sloping demand curve for the product. If the monopolist charged the highest price, the monopolist would only sell one unit or no units of the product. The monopolist, however, is concerned with maximizing profits, not with charging the highest price. A lower price would produce more revenue relative to cost. The monopolist will charge the price where the additional revenue from the sale of another unit just equals the additional cost of the additional units, or where MR = MC. The monopolist will set price somewhere in the elastic portion of the demand curve where marginal revenue is positive but less than price.