When marginal cost exceeds marginal revenue,a monopolist should reduce

Name: When marginal cost exceeds marginal revenue,a monopolist should reduce
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Question

Quizplus · Accepted Answer

When marginal cost exceeds marginal revenue, the firm is producing more than it should, and it is incurring losses. By reducing output, the firm can bring marginal cost in line with marginal revenue, which improves its profitability. Thus, the best choice for a monopolist when marginal cost exceeds marginal revenue is to reduce output.

When Marginal Cost Exceeds Marginal Revenue,a Monopolist Should Reduce