A profit-maximizing monopolist will never choose to produce at a level of output that generates negative marginal revenue.

Question

Quizplus · Accepted Answer

A profit-maximizing monopolist will always produce at the level of output where marginal revenue equals marginal cost. If producing at a higher level of output would lead to negative marginal revenue, the monopolist would instead produce less and earn a higher profit.

A Profit-Maximizing Monopolist Will Never Choose to Produce at a Level