question archive Which of the following options is correct? A profit-maximizing monopolist will continue expanding output as long as a
Which of the following options is correct? A profit-maximizing monopolist will continue expanding output as long as a
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Which of the following options is correct?
A profit-maximizing monopolist will continue expanding output as long as
a. marginal revenue exceeds marginal cost.
b. marginal revenue is positive.
c. economic profit is more than zero.
d. the cost of producing an additional unit exceeds the marginal revenue derived from the unit.
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The correct option is a. marginal revenue exceeds marginal cost.
As long as marginal revenue is greater than marginal cost, a unit will earn more than what is spent on producing it. Such units that have marginal revenue higher than marginal cost will have a net positive effect on the total profit and will increase it.
