If a monopolist is producing a quantity where 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.

Question

If a monopolist is producing a quantity where 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

If MC is greater than MR for a monopolist, it means that the cost of producing an additional unit exceeds the revenue gained from selling that additional unit. This indicates that the monopolist is producing too much output, and reducing production would increase profits. Therefore, the best choice is D, which states that profits can be increased by decreasing production.

If a Monopolist Is Producing a Quantity Where MC >