Ameritech Has a Monopoly Over Local Telephone Service

question 101

Multiple Choice

Ameritech has a monopoly over local telephone service. If Ameritech is producing where marginal revenue is less than marginal cost, the firm

• A) could increase profits by reducing output.
• B) could increase profits by increasing output.
• C) is maximizing profits.
• D) must be earning a zero profit.

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