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12 September, 04:52

If at an output of 10 units a monopolist is earning a positive profit, marginal revenue is $6, and marginal cost is $4, then the monopolist:

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  1. 12 September, 08:35
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    Increase output

    Explanation:

    A monopolist will stay in the market and increase output as long as the MR< MC. In the above scenario, marginal revenue is $6, and the marginal cost is $4 which means that monopolist is earning positive profits. In this case, a monopolist should increase the output to earn more profit. A monopolist will increase output until MR=MC.
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