Final answer:
The monopolist maximizes profit by producing where marginal revenue equals marginal cost, not necessarily where marginal cost equals price, hence the statement is false.
Step-by-step explanation:
The statement that a monopolist maximizes profit by producing an output level where marginal cost equals price is false. A monopolist does not necessarily produce where marginal cost equals price, but rather where marginal revenue (MR) equals marginal cost (MC). This is the profit-maximizing rule for a monopolist because it ensures that the additional revenue from selling one more unit is equal to the additional cost of producing that unit. Once the monopolist has determined the profit-maximizing quantity by equating MR to MC, they then decide the price to charge based on the demand curve. Consequently, the process to maximize profit includes determining the profit-maximizing level of output, then setting the corresponding price.