honeycfa

A monopolist will continue expanding output as long as:

A) marginal revenue is positive.

B) marginal revenue is greater than marginal cost.

C) economic profit is greater than zero.

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The optimum behavior of all firms is to produce until the point where MR = MC. So, the monopolist can increase total profit by increasing production as long as marginal revenue is greater than marginal costs.

honeycfa

A monopolist will maximize profits by:

A) producing at the output level where marginal revenue equals marginal cost and charging a price on the demand curve that corresponds to the output rate.

B) producing at the point where price is equal to MR.

C) producing at the output level where marginal revenue equals average variable cost and charging a price along the demand curve that corresponds to the output rate.

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A monopolist will maximize profits by producing at the output level where marginal revenue equals marginal cost and charging a price on the demand curve that corresponds to the output rate.