Does a monopolist charge the highest price possible?

Does a monopolist charge the highest price possible?

The monopolist cannot charge the highest price possible, it will maximize profit where TR minus TC is the greatest. This depends on quantity sold as well as on price. The monopolist can charge the price that consumers will pay for that output level. Therefore, the price is on the demand curve.

Is monopoly price always a high price?

Because a monopoly's marginal revenue is always below the demand curve, the price will always be above the marginal cost at equilibrium, providing the firm with an economic profit. Monopoly Pricing: Monopolies create prices that are higher, and output that is lower, than perfectly competitive firms.

What is price in a monopoly?

From Wikipedia, the free encyclopedia. A Monopoly price is set by a seller with market power; that is, a seller who can drive up the price by reducing the quantity he sells, as opposed to "perfect competition", under which sellers simply take the market price as given.

How a monopoly choose price and output?

The monopolist will select the profit-maximizing level of output where MR = MC, and then charge the price for that quantity of output as determined by the market demand curve. If that price is above average cost, the monopolist earns positive profits.