If marginal cost exceeds marginal revenue, a profit-maximizing monopolist will:
A. restrict output to increase the price even higher.
B. raise price and expand output to increase profit.
C. lower price and expand output to increase profit.
D. attempt to maintain this position because it is consistent with profit maximization.
Answer: A
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Adam's Apples, a small firm supplying apples in a perfectly competitive market, decides to cut its production in half this year. As a result, the
a. market price will rise b. market price will fall c. market quantity will rise d. market price will not be affected e. total expenditures on apples will rise
In the short run, average variable cost is always less than average total cost
a. True b. False Indicate whether the statement is true or false
A tax that is higher for men than for women violates the criterion of
a. horizontal equity. b. vertical equity. c. the ability-to-pay principle. d. the marriage tax.
The slope of the supply of loanable funds is based on the logic that an increase in interest rates
a. makes saving more attractive. b. makes saving less attractive. c. makes investment more attractive. d. makes investment less attractive.