A Monopoly Finds That, at Its Present Level of Output

question 11

Multiple Choice

A monopoly finds that, at its present level of output and sales, marginal revenue equals $5 and marginal cost is $4.10.Which of the following will maximize profits?

• A)Leave price and output unchanged.
• B)Increase price and leave output unchanged.
• C)Increase price and decrease output.
• D)Decrease price and increase output.
• E)Decrease price and leave output unchanged.