If a pure monopolist is producing more output than the MR = MC output,
A)the firm may, or may not, be maximizing profits.
B)it will be in the interest of the firm, but not necessarily of society, to reduce output.
C)it will be in the interest of the firm and society to increase output.
D)it will be in the interest of the firm and society to reduce output.

Question

Quizplus · Accepted Answer

When a pure monopolist is producing more output than the MR = MC output, it means they are producing beyond the point where marginal revenue equals marginal cost, which is the profit-maximizing condition. Reducing output to where MR = MC will increase the monopolist's profits by reducing unnecessary production costs. However, this reduction in output can lead to higher prices and reduced consumer surplus, which may not align with societal interests in terms of efficiency and equity.

If a Pure Monopolist Is Producing More Output Than the MR