If a monopolist's marginal revenue exceeds its marginal cost at its current level of output, then to maximize its profit the monopolist should:
A)do nothing.
B)decrease output in order to increase the gap between marginal revenue and marginal cost.
C)increase output until marginal revenue equals marginal cost.
D)increase output until price equals marginal cost.

Question

Quizplus · Accepted Answer

Following the Cost-Benefit Principle, all firms maximize their profit by choosing the level of output at which marginal revenue equals marginal cost.

If a Monopolist's Marginal Revenue Exceeds Its Marginal Cost at Its