Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder

Exercise 29

In everyday discussions, people tend to talk about monopoly firms ''setting high prices,'' but in this chapter we have talked about choosing a profit-maximizing level of output. Are these two approaches saying the same thing? What kind of rule would a monopoly follow if it wished to choose a profit-maximizing price? Why not charge the highest price possible?