If a monopolist is producing a quantity that generates MC

Question

If a monopolist is producing a quantity that generates MC < MR,then profit:

A) is maximized.
B) is maximized only if MC = P.
C) can be increased by increasing production.
D) can be increased by decreasing production.

Gaurav Sharma · Accepted Answer

Final Answer : C, Explanation :  To maximize profits, a monopolist should produce at the level where marginal cost (MC) equals marginal revenue (MR). If MC < MR, increasing production will bring MC closer to MR, increasing profits.

If a monopolist is producing a quantity that generates MC < MR,then profit:

A) is maximized.
B) is maximized only if MC = P.
C) can be increased by increasing production.
D) can be increased by decreasing production.

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Learning Objectives

Related questions

If a monopolist is producing a quantity that generates MC < MR,then profit:A) is maximized.B) is maximized only if MC = P.C) can be increased by increasing production.D) can be increased by decreasing production.

Definitions

Learning Objectives

Learning Objectives

Related questions

If a monopolist is producing a quantity that generates MC < MR,then profit:

A) is maximized.
B) is maximized only if MC = P.
C) can be increased by increasing production.
D) can be increased by decreasing production.