A monopoly responds to an increase in marginal cost by _______ price and _______ output.
A) increasing; decreasing
B) increasing; increasing
C) decreasing; increasing
D) decreasing; decreasing

Question

Quizplus · Accepted Answer

A monopoly responds to an increase in marginal cost by increasing price to cover the higher costs and decreasing output to maintain profit margins, reflecting a move up along its marginal cost curve.

A Monopoly Responds to an Increase in Marginal Cost by _______