A monopolist will choose to increase output when
A)market price increases.
B)at all levels of output, marginal cost increases.
C)at the present level of output, marginal revenue exceeds marginal cost.
D)the demand curve shifts to the left.

Question

Quizplus · Accepted Answer

A monopolist will choose to increase output as long as the marginal revenue they receive from selling an additional unit is greater than the marginal cost of producing that unit. In other words, the monopolist will continue to produce as long as they are making a profit on each additional unit. If marginal revenue exceeds marginal cost at the present level of output, the monopolist will choose to increase output to maximize their profit.

A Monopolist Will Choose to Increase Output When