Although a monopolist can charge any price he likes, but does not charge a higher price than his equilibrium price because
A. higher price means fall in total revenue.
B. higher price can be charged only on that segment of firm’s demand curve which is price inelastic implying that the marginal revenue will be negative.
C. it is inconsistent with profit maximization goal under monopoly.
D. marginal cost will be negative over the relevant range of output.
Answer:A
Although a monopolist can charge any price he likes, but does not charge a higher price than his equilibrium price because
A. higher price means fall in total revenue. B. higher price can be charged only on that segment of firm’s demand curve which is price inelastic implying that the marginal revenue will be negative. C. it is inconsistent with profit maximization goal under monopoly. D. marginal cost will be negative over the relevant range of output.