Suppose a monopolist is producing a level of output such that MR > MC. What should the firm do to maximize its profits?
a. The firm should hire less labor.
b. The firm should do nothing Suppose a monopolist is producing a level of outpu> it wants to maximize the difference between MR and MC in order to maximize its profits.
c. The firm should increase price.
d. The firm should increase output.

In the case when the monopolist wants to generate the output level in such a way when the marginal revenue is more than the marginal cost so if the firm wants to maximize its profit so it should have to increase the output as the marginal revenue would begins to reduce and it is equivalent to the marginal cost i.e. become significant in order to maximize the profit

anthougo anthougo · Answer 2 · 2022-01-14T12:32:45+01:00

The monopolist producing where MR > MC can maximize its profits if d. The firm should increase output.

Who is a monopolist?

A monopolist is known for these characteristics. A monopolist is a single seller, a profit maximizer, a price maker, sets high barriers so that competitors do not enter the market and practices price discrimination.

At MR = MC, the monopolist maximizes profits. However, if its MR > MC, it implies that the firm is under-producing. It can increase production to maximize profits.

Thus, the monopolist whose MR > MC can maximize profits by increasing its output.

Learn more about the monopolist here: https://brainly.com/question/7217942