If a monopolist were to discover that at his current output level,marginal revenue is $13 and marginal cost is $20,then he
A) must be earning a loss.
B) needs to expand output.
C) is maximizing profit.
D) needs to lower price.
E) needs to reduce output.

Question

Quizplus · Accepted Answer

A monopolist maximizes profit where marginal revenue equals marginal cost. If marginal revenue ($13) is less than marginal cost ($20), the monopolist should reduce output to increase profit.

If a Monopolist Were to Discover That at His Current