If a monopolist produces at that output level where marginal revenue exceeds marginal cost, 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 until marginal revenue (MR) equals marginal cost (MC). If MR > MC, increasing output will increase profits until MR = MC, which typically requires lowering the price to sell the additional output.

If a Monopolist Produces at That Output Level Where Marginal