If a monopolist is producing a quantity that generates MC

Name: If a monopolist is producing a quantity that generates MC < MR,then profit: A)is maximized. B)is maximized only if MC = P. C)can be increased by increasing production. D)can be increased by decreasing production.
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Question

If a monopolist is producing a quantity that generates MC < MR,then profit:
A)is maximized.
B)is maximized only if MC = P.
C)can be increased by increasing production.
D)can be increased by decreasing production.

Quizplus · Accepted Answer

To maximize profits, a monopolist should produce at the level where marginal cost (MC) equals marginal revenue (MR). If MC < MR, increasing production will bring MC closer to MR, increasing profits.

If a Monopolist Is Producing a Quantity That Generates MC