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

question 92

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 is upward sloping, what can we conclude about the monopolist?

• A) It could increase profit by increasing his price.
• B) It is producing at the profit-maximizing level of output.
• C) It should exit the market if significant fixed costs have been incurred.
• D) It could increase profit by increasing output.

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