If a monopolist produces to a point at which marginal revenue is greater than marginal cost then
A) profits are being maximized.
B) profits will always be negative.
C) the incremental cost of producing the last unit exceeds the incremental revenue.
D) the incremental cost of producing the last unit is less than the incremental revenue.

Question

Quizplus · Accepted Answer

In a monopolistic market, if the marginal revenue (MR) is greater than the marginal cost (MC), it indicates that the revenue gained from selling one more unit of a product is higher than the cost of producing that additional unit. This suggests that the firm can increase its profit by producing more units, as each additional unit produced adds more to revenue than it does to costs, until MR equals MC.

If a Monopolist Produces to a Point at Which Marginal