If a Monopolist's Marginal Revenue Is $25 a Unit and Its

question 125

Multiple Choice

If a monopolist's marginal revenue is $25 a unit and its marginal cost is $25, then

• A)to maximize profit the firm should increase output.
• B)to maximize profit the firm should decrease output.
• C)to maximize profit the firm should continue to produce the output it is producing.
• D)Not enough information is given to say what the firm should do to maximize profit.

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Definitions:

Computer Software

Programs and other operating information used by a computer to perform specific tasks.

Variable Cost

Costs that vary directly with the level of production or output in a company, such as raw materials and labor expenses.

Total Cost

refers to the sum of all expenses incurred in the production of goods or services, including fixed and variable costs.

Computer Software

Programs and operating information used by a computer to perform specific tasks.