At his current level of output,a monopolist has a MR of $10,a MC of $6,and an economic profit of zero.If the market demand curve is downward sloping and his marginal cost curve is upward sloping,the monopolist:
A) is producing at the profit-maximizing level of output.
B) could increase profit by increasing output.
C) could increase profit by increasing his price.
D) should exit the market if significant fixed costs have been incurred.

Question

Quizplus · Accepted Answer

The monopolist can increase profit by increasing output because MR ($10) is greater than MC ($6), indicating that producing more would add to profit.

At His Current Level of Output,a Monopolist Has a MR