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anna has a monopoly selling her patented alcoholic maple syrup. currently, her marginal revenue is $18 and her marginal cost is $26. the price of a bottle of syrup is $34. she should:____

User Gnikit
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Final answer:

Anna should decrease production because her marginal revenue is less than her marginal cost, thus producing additional units would not be profitable.

Step-by-step explanation:

Anna has a monopoly selling her patented alcoholic maple syrup. Given that her current marginal revenue is $18 and her marginal cost is $26, while the selling price of a bottle of syrup is $34, economic theory suggests that she should not produce additional units of syrup because the cost of producing an extra unit ($26) is more than the revenue she would receive from selling it ($18). Producing more would only increase her losses. In economics, profit maximization occurs at the quantity of output where marginal revenue equals marginal cost (MR = MC), and since MR < MC in Anna's case, she should decrease her production to where MR = MC.

User Djsly
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