If a monopolist produces at that output level where marginal cost exceeds marginal revenue, to maximize profits the firm should
A) increase output and increase price
B) decrease output and increase price
C) increase output and decrease price
D) decrease output and decrease price

Question

Quizplus · Accepted Answer

To maximize profits, a monopolist should produce where marginal cost equals marginal revenue. If marginal cost exceeds marginal revenue, the firm should decrease output to reduce costs and increase price to increase revenue.

If a Monopolist Produces at That Output Level Where Marginal