If the variable costs of a profit-maximizing pure monopolist decline, the firm should
A)produce more output and charge a higher price.
B)produce more output and charge a lower price.
C)reduce both output and price.
D)raise both output and price.

Question

Quizplus · Accepted Answer

When the variable costs of a profit-maximizing pure monopolist decline, the firm can produce more at a lower cost, leading to an increase in output and a decrease in price to sell the additional output.

If the Variable Costs of a Profit-Maximizing Pure Monopolist Decline