If the variable costs of a profit-maximizing pure monopolist decline, the firm should

Name: If the variable costs of a profit-maximizing pure monopolist decline, the firm should
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Quizplus · Accepted Answer

As variable costs decline, the marginal cost of production decreases. Therefore, the monopolist should produce more output to maximize profit. To sell this additional output, the firm should reduce the price. This will increase the total revenue and hence the profit of the monopolist.

If the Variable Costs of a Profit-Maximizing Pure Monopolist Decline