If a monopolist's marginal revenue is $25 a unit and its marginal cost is $25, then
A)to maximize profit the firm should increase output.
B)to maximize profit the firm should decrease output.
C)to maximize profit the firm should continue to produce the output it is producing.
D)Not enough information is given to say what the firm should do to maximize profit.

Question

Quizplus · Accepted Answer

Since the marginal revenue and marginal cost are equal in this scenario, the monopolist is already producing the output level that maximizes its profit. Therefore, there is no need to increase or decrease output.

If a Monopolist's Marginal Revenue Is $25 a Unit and Its