If the LMC curve is less than the MR curve at the point of output for a monopolist that is making profit, then the firm has

If the LMC curve is less than the MR curve at the point of output for a monopolist that is making profit, then the firm has



a. too large a plant size.
b. too small a plant size.
c. insufficient knowledge about plant size until he knows his short-run marginal cost.
d. insufficient knowledge about plant size until he knows his demand curve.


Answer: b. too small a plant size.


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