If a Profit-Maximizing Monopolist Finds That Marginal Cost Is Increasing

question 88

Multiple Choice

If a profit-maximizing monopolist finds that marginal cost is increasing and exceeds marginal revenue,it should:

• A) increase output and decrease price.
• B) increase price and decrease output.
• C) decrease both price and output.
• D) increase both price and output.

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Definitions:

Nonpathological Caution

A level of prudence or vigilance that is considered normal and healthy, not indicative of a psychological disorder.

Obsessive-Compulsive-Related Disorders

A group of disorders in which obsessive-like concerns drive people to repeatedly and excessively perform specific patterns of behavior that greatly disrupt their lives.

Exposure Therapies

Psychological treatments that involve the exposure to feared stimuli or situations in order to reduce anxiety and desensitize individuals to the source of their fear.

Compulsive Behavior

Behavior patterns that are repeated to reduce anxiety or distress but are not connected in a realistic way with what they are designed to neutralize.