Suppose that a monopoly is currently producing the quantity at which marginal revenue is less than marginal cost.The monopoly can increase its profit by ________.
A) shutting down
B) lowering its price and increasing its output
C) raising its price and decreasing its output
D) lowering its price and decreasing its output
E) not changing its price and increasing its output

Question

Quizplus · Accepted Answer

When marginal revenue is less than marginal cost, the monopoly can increase profit by reducing output and raising the price, as this will reduce costs and increase revenue per unit.

Suppose That a Monopoly Is Currently Producing the Quantity at Which