Which of the following is true for a non price discriminating monopoly?

• A. It produces at the point where price equals marginal cost.
• B. It faces a perfectly elastic demand curve.
• C. It sets different prices for different consumers based on their willingness to pay.
• D. It charges the same price to all consumers for the same product.

Answer: (D)

Verified step by step guidance

1. Understand the concept of a non price discriminating monopoly: it is a monopolist that charges a single price for its product to all consumers, regardless of their willingness to pay.
2. Recall that a monopoly maximizes profit by producing the quantity where marginal revenue (MR) equals marginal cost (MC), not where price equals marginal cost, which is typical of perfect competition.
3. Recognize that a monopoly faces a downward sloping demand curve, meaning it does not face a perfectly elastic demand curve; instead, the demand curve reflects the relationship between price and quantity demanded.
4. Know that price discrimination involves charging different prices to different consumers based on their willingness to pay, which a non price discriminating monopoly does not do.
5. Conclude that the true statement for a non price discriminating monopoly is that it charges the same price to all consumers for the same product.