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A monopolist desiring to increase its profit has just discovered that lowering its price and selling more output yielded the desired result. Profit increased. Based on this, one can conclude that the marginal
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25 votes
A monopolist desiring to increase its profit has just discovered that lowering its price and selling more output yielded the desired result. Profit increased. Based on this, one can conclude that the marginal cost of production is _____ the marginal revenue from production.

User Wodow
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22 votes
22 votes

Answer:

Less than

Step-by-step explanation:

The marginal cost of production is that change in the total production cost when an extra unit is produced. While the Marginal revenue from production is the additional profit realized from production due to the sale of an extra unit.

Generally, When, the marginal cost is less than the marginal revenue, the company's production is low and should increase its output to maximize profit.

A monopolist has to its price in order to sell due to marginal revenue not equalling to price, the monopolist maximizes profits by ensuring its marginal revenue and its marginal cost are the same. Producing when Price is greater than marginal cost makes a monopolist realize profits.

User MisterSmith
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