Suppose a monopoly is producing output so that marginal revenue equals marginal cost.If the monopolist reduces output,it:
A)can charge a higher price.
B)will increase profits.
C)will decrease marginal revenue.
D)can't change the price because it is a price taker.

Question

Quizplus · Accepted Answer

If the monopolist reduces output, the marginal revenue will increase, which means the monopolist can charge a higher price without losing too many customers. This will lead to an increase in profits.

Suppose a Monopoly Is Producing Output So That Marginal Revenue