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NEW QUESTION: 1
Assume that Company B is the only producer of breakfast cereal. If at the current level of production, the marginal revenue for a box of cereal is $2.50 while the marginal cost is $2.00, we would expect
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A. increase the level of production.
B. raise the price of a box of cereal.
C. hold the level of production constant.
Answer: A
Explanation:
The monopolist will continue to increase production as long as marginal revenue is greater than marginal cost.
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