1215

A monopolist will expand production until:

A) MR = MC and the price of the product will be determined by the MR curve.

B) P = MC and the price of the product will be determined by the MC curve.

C) MR = MC and the price of the product will be determined by the demand curve.

---

A monopolist will expand production until MR = MC. The demand curve lies above the intersection of the MR and MC curve and the price charged is the price on the demand curve for the output where MR = MC.

1215

If a profit maximizing firm finds that its marginal revenue exceeds its marginal cost, it should increase output:

A) if it is a price taker, but not if it is a price searcher.

B) regardless of whether it is a price taker or a price searcher.

C) if it is a price searcher, but not if it is a price taker.

---

Any firm will maximize profits by producing the output where MR = MC.

1215

Which of the following statements about a monopolist is least accurate?

A) A monopolist will always be able to earn economic profit.

B) A profit-maximizing monopolist will expand output until marginal revenue equals marginal cost.

C) A profit-maximizing monopolist will supply less of his product than the amount consistent with the conditions of ideal static efficiency for an economy.

---

Monopolists maximize profit when MR = MC. If the ATC curve lies above the demand curve, monopolists will lose money.