A Monopoly Is Producing Output So That the Average Total

question 315

Multiple Choice

A monopoly is producing output so that the average total cost is $30,the marginal revenue is $40,and the price is $50.If ATC is at its minimum level and the ATC curve is U-shaped,to maximize profits,this firm should:

• A) increase output.
• B) reduce output.
• C) do nothing;it is already maximizing profits.
• D) shut down.

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