A certain monopolist has a positive marginal cost of production.Despite this fact, the monopolist decides to produce a quantity of output that maximizes total revenues.Assume that the marginal revenue curve for this monopolist always has a negative slope.Then the monopolist
A)is minimizing its profits.
B)produces the same output that it would if it maximized profits.
C)produces less output than it would if it maximized profits.
D)produces more output than it would if it were maximizing profits.
E)produces an output where marginal revenue is strictly less than 1.

Question

Quizplus · Accepted Answer

A monopolist aiming to maximize total revenues rather than profits will produce more output than if they were maximizing profits, because profit maximization occurs where marginal cost equals marginal revenue, which is at a lower quantity than where total revenue is maximized.

A Certain Monopolist Has a Positive Marginal Cost of Production