A monopolist earning economic profit in the short run determines that at its present level of output, marginal revenue is $23 and marginal cost is $30. Which of the following should the firm do to increase profit?
A. Raise price and lower output.
B. Lower price and lower output.
C. Raise price and raise output.
D. Lower price and raise output.
Answer: A
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a. True b. False Indicate whether the statement is true or false
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If a company has two profit centers where one supplies the other with necessary ingredients to a company product, and if the relationship between two centers is clearly inimical to company success, then:
A. the company should probably reorganize. B. it is time to use the market-based transfer price system. C. it is time to implement a marginal cost based transfer system. D. the company should change its management control system.