Suppose We Are Unique Corporation, a Monopoly, Finds That at Its

question 12

Multiple Choice

Suppose We Are Unique Corporation, a monopoly, finds that at its current production levels marginal revenue is $18 while marginal cost if $20. This company should:

• A) make no change in present production level.
• B) without further information on average production cost there is no way to determine what actions the company should take.
• C) decrease production, as this will allow price and marginal revenue to increase, thereby increasing profits.
• D) increase output as this will result in higher profits.