Copyright

If a monopoly finds that at the present level of production, marginal revenue exceeds marginal...

Question:

If a monopoly finds that at the present level of production, marginal revenue exceeds marginal cost, the firm should:

a. shut down.

b. increase production.

c. maintain the production level because MR > MC signifies economic profit.

d. decrease production so that MC will equal MR.

Monopoly's Profits

In economics, a monopoly will produce a quantity that yields the maximum profit at the intersection point between the marginal revenue curve and the marginal cost curve.

Answer and Explanation: 1

Become a Study.com member to unlock this answer!

View this answer


  • The correct answer is: b. increase production..

A monopolist produces a quantity that gives the maximum profit at the point where the marginal...

See full answer below.


Learn more about this topic:

Loading...
What is a Monopoly in Economics? - Definition & Impact on Consumers

from

Chapter 7 / Lesson 2
35K

Understand the meaning of a monopoly in economics and what it does. Also, know the characteristics of a monopoly and the different types of monopolies.


Related to this Question

Explore our homework questions and answers library