Question

14. Which of the following statements about monopoly firms are correct? I. Monopoly firms will produce the quantity of output where the marginal cost of the last unit of) that amount of output is just equal to the marginal revenue from selling the last unit of) that amount of output. II. Monopoly firms will never produce a quantity of output that falls in the elastic section of the demand curve faced by that monopolist. III. A profit maximizing monopolist will always produce an output level at which the marginal willingness-to-pay of consumers is greater than the marginal cost of production. Which of the above statements are true? (A) I only (B) II only (C) III only (D) I and II (E) I and III (F) II and III (G) I and II and III (H) none of the above