A monopolist can increase profits by: Raising prices indefinitely Decreasing marginal costs to zero Producing at the level where marginal cost equals marginal revenue Lowering prices to increase competition

Question

A monopolist can increase profits by: Raising prices indefinitely Decreasing marginal costs to zero Producing at the level where marginal cost equals marginal revenue Lowering prices to increase competition

Answer 1

monopolist can increase profits by producing at the level where marginal cost equals marginal revenue. This is because, in a monopoly, the monopolist is the sole supplier of a good or service and has the power to set prices. By producing at the level where marginal cost equals marginal revenue, the monopolist can maximize their profits by ensuring that the cost of producing an additional unit of the good is equal to the revenue generated from selling that unit. This is the profit-maximizing level of output for a monopolist.

Question

A monopolist can increase profits by: Raising prices indefinitely Decreasing marginal costs to zero Producing at the level where marginal cost equals marginal revenue Lowering prices to increase competition

Solution

Resposta