If a monopoly is producing an amount of output level at which marginal revenue exceeds marginal cost, in order to increase its profit the monopoly will ________ its price and ________ its output.
A) raise; decrease
B) lower; increase
C) lower; decrease
D) raise; increase

Question

Quizplus · Accepted Answer

When marginal revenue exceeds marginal cost, the monopoly can increase its profit by producing more output and lowering the price, as this will increase total revenue more than total cost.

If a Monopoly Is Producing an Amount of Output Level