If a profit-maximizing monopoly is producing an output at which marginal cost exceeds marginal revenue,it
A)raises the price and decreases output to increase economic profit.
B)lowers the price and increases output to increase economic profit.
C)lowers the price and decreases output to increase economic profit.
D)is incurring an economic loss.
E)is maximizing profit.

Question

Quizplus · Accepted Answer

If marginal cost exceeds marginal revenue, the monopoly is not maximizing profit. To increase profit, the monopoly should raise the price and decrease output until marginal cost equals marginal revenue.

If a Profit-Maximizing Monopoly Is Producing an Output at Which