A single-price monopoly has marginal cost of $23 and marginal revenue of $28. Which of the following is definitely correct?

Question

Quizplus · Accepted Answer

The monopoly has a marginal revenue greater than its marginal cost, which means it should increase its production to increase its profit. Option A is incorrect because producing less would cause the monopoly to miss out on potential revenue. Option B is incorrect because the monopoly could still increase its profit by producing more. Option D is unknown as we don't have information on the monopoly's total revenue and total cost. Option E is not necessary as long as the monopoly can cover its variable costs by producing and selling its product.

A Single-Price Monopoly Has Marginal Cost of $23 and Marginal