If a monopoly firm produces where P = MC, it could _______ profits by producing _______ and _______ its price.
A) increase; less; raising
B) decrease; less; lowering
C) decrease; less; raising
D) A and B are true.

Question

Quizplus · Accepted Answer

In a monopoly, producing where P = MC is not profit-maximizing. To increase profits, the firm should produce less and raise its price, exploiting its market power.

If a Monopoly Firm Produces Where P = MC, It