What should a profit-maximising monopolist do if she is currently producing where MC

Question

What should a profit-maximising monopolist do if she is currently producing where MC < MR?
A) Increase output until MC = MR.
B) Decrease output until MC = MR.
C) Shut down in the long run.
D) Keep producing at this level.

Quizplus · Accepted Answer

When a monopolist is producing where MC < MR, it means that the marginal cost of producing additional units is less than the marginal revenue earned from selling those units. This implies that the monopolist can increase profits by producing more units until the point where MC equals MR, which is the profit-maximizing output level. Therefore, the monopolist should increase output until MC=MR.

What Should a Profit-Maximising Monopolist Do If She Is Currently