The XYZ Computer Company has a monopoly over the production of a specialized color printer. The XYZ Computer Company will find it profitable to reduce output as long as marginal revenue
A) is greater than marginal cost.
B) equals marginal cost.
C) is less than marginal cost.
D) is positive.

Question

Quizplus · Accepted Answer

In a monopolistic market, a firm will find it profitable to reduce output when marginal revenue is less than marginal cost, as this indicates that the cost of producing an additional unit is greater than the revenue generated from selling it, thus reducing profit.

The XYZ Computer Company Has a Monopoly Over the Production