Question

multiple choice question
how much will a profit - seeking monopolist produce if producing is preferable to shutting down?
o up to the output at which marginal revenue is less than marginal cost
o as much as possible, since more production means more revenue
o up to the output at which marginal revenue equals marginal cost
o up to the output at which marginal revenue exceeds marginal cost

Explanation:

A profit - seeking monopolist maximizes profit when marginal revenue (MR) equals marginal cost (MC). Producing beyond the MC = MR point would lead to a decrease in profit as the cost of producing an additional unit exceeds the revenue it generates. Producing less than the MC = MR point means the monopolist is not maximizing potential profit.

Answer:

Up to the output at which marginal revenue equals marginal cost