An unregulated monopoly finds that its marginal cost exceeds its marginal revenue. In order to increase its profit, the firm will
A) raise its price and decrease its output.
B) lower its price and increase its output.
C) raise its price and increase its output.
D) continue to produce this level of output because any change will lower its profit.

Question

Quizplus · Accepted Answer

A monopoly with marginal cost exceeding marginal revenue will increase profit by raising price and decreasing output.

An Unregulated Monopoly Finds That Its Marginal Cost Exceeds Its