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

question 109

Multiple Choice

At his current level of output, a monopolist has an MR of $10, an MC of $6, and an economic profit of zero. If the market demand curve is downward sloping and his marginal cost curve upward sloping, the monopolist

• A) is producing his profit-maximizing level of output.
• B) could increase his profit by increasing his output.
• C) could increase his profit by increasing his price.
• D) should exit the market if he has positive fixed cost.

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