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
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- The correct answer is: b. increase production..
A monopolist produces a quantity that gives the maximum profit at the point where the marginal...
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What is a Monopoly in Economics? - Definition & Impact on Consumers
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Chapter 7 / Lesson 2
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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.
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