Question

Suppose a monopolist's costs and revenues are as follows: ATC = $50.00; MC = $45.00; MR = $40.00; P = $55.00. The firm should

Answer 1

I encountered this question but it should have choices. The choices were

A) decrease output and increase price.

B) not change output or price.

C) increase output and decrease price.

D) shut down.

The firm should DECREASE OUTPUT AND INCREASE PRICE.

MC is greater than MR thus the need for decrease in output and increase in price.