Suppose a monopolist chooses the price and production level that maximizes its profit. From that point, to increase society's economic welfare, output would need to be increased as long as
A)average revenue exceeds marginal cost.
B)average revenue exceeds average total cost.
C)marginal revenue exceeds marginal cost.
D)marginal revenue exceeds average total cost.

Question

Quizplus · Accepted Answer

To increase society's economic welfare, output should be increased as long as average revenue (price) exceeds marginal cost, indicating that the value to consumers is greater than the cost of producing additional units.

Suppose a Monopolist Chooses the Price and Production Level That