For a single-price monopoly,
A) if marginal cost exceeds marginal revenue, profits will increase if output decreases.
B) if marginal revenue exceeds marginal cost, profits will increase if output decreases.
C) there are several different price and output combinations that maximize profit.
D) marginal revenue will be greater than price if demand is elastic.
E) marginal revenue will be greater than price if demand is inelastic.

Question

Quizplus · Accepted Answer

If marginal cost exceeds marginal revenue, reducing output will decrease costs more than it decreases revenue, thus increasing profits.

For a Single-Price Monopoly