Explain how a profit-maximizing monopolist chooses its level of output and the price of its goods. What might happen if the government and citizens are not happy when the monopolist’s price is too high? Explain.
A monopolist will choose its quantity output first and then the price of the goods, they will produce at the point where the MR=MC as at that point the monopoly in the market will be maximising its profit.
The price of the good will be set accordingly as per the demand of those goods. generally the price of the good will be at the elastic part of the demand curve.
If the consumer and the government do not like the monopolist price then they can request the government to set a price ceiling on the monopoly or dilute the market and increase the competition to bring the price down.
Explain how a profit-maximizing monopolist chooses its level of output and the price of its goods....