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In the Short Run, How Will a Profit-Maximizing Monopolist React

Question 222

Multiple Choice

In the short run, how will a profit-maximizing monopolist react if its marginal cost suddenly increases? It will


A) lower price to expand revenue possibilities.
B) reduce output and raise price.
C) maintain the current price if profit is still positive.
D) increase plant size to lower marginal cost.
E) decrease plant size to lower marginal cost.

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