James operates a monopoly hiking gear store in the woodland trails near his home in the Ozarks. He is currently producing at an

Question

2 years ago

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output level where marginal revenue equals marginal cost. If James were to reduce his output, he:

1 answer:

cupoosta [38] · Answer 1 · 2023-06-12T12:45:06+03:00

James will need to decrease the marginal revenue to reduce his output.

<h3>What happens when marginal revenue equals marginal cost?</h3>

This is known as an economic equilibrium and there is no economic profit in such equilibrium.

To incur profit now, he will have need to decrease the marginal revenue to reduce his output

Therefore, the Option B is corrrect

Missing options <em>"will increase profits, will decrease marginal revenue, can charge a higher price."</em>

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