Because of a decrease in labor costs, a monopoly finds that its marginal cost and average total cost have decreased. The monopoly ________ its price and ________ its quantity.
A) raises; increases
B) raises; decreases
C) lowers; increases
D) lowers; decreases

Question

Quizplus · Accepted Answer

A decrease in marginal cost allows the monopoly to produce more at a lower cost, leading to a lower price and increased quantity to maximize profit.

Because of a Decrease in Labor Costs, a Monopoly Finds