If a profit-maximizing monopoly is producing an output at which marginal cost exceeds marginal revenue, it
A)should raise the price and decrease output.
B)should lower the price and increase output.
C)should lower the price and decrease output.
D)is incurring an economic loss.
E)is maximizing profit.

Question

Quizplus · Accepted Answer

When marginal cost exceeds marginal revenue, the monopoly should reduce output to increase profit, which typically involves raising the price.

If a Profit-Maximizing Monopoly Is Producing an Output at Which