If a monopolist knows that at his current output level,marginal revenue is $8 and marginal cost is $8,then he
A) must be earning a profit.
B) is maximizing profit.
C) must be earning a loss.
D) needs to raise price.
E) needs to reduce output.

Question

Quizplus · Accepted Answer

A monopolist maximizes profit where marginal revenue equals marginal cost. In this case, the monopolist's marginal revenue and marginal cost are both $8, indicating that they are already maximizing profit at their current output level.

If a Monopolist Knows That at His Current Output Level,marginal