Why a monopoly might decide on their own to increase product

Reference no: EM13207312

In order to maximize profits, monopolies produce where: MARGINAL REVENUE = MARGINAL COST < MARKET PRICE. Contrast this to the profit maximization condition for perfectly competitive markets and explain how these differences contribute to deadweight loss in a monopoly market. Can you think of reasons why a monopoly might decide on their own to increase production and lower prices to earn an acceptable profit rather than maximize profits?

Reference no: EM13207312

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Why a monopoly might decide on their own to increase product : monopolies produce where: MARGINAL REVENUE = MARGINAL COST

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