Assume that a monopolist decides to maximize revenue rather than profit. How does this operating objective change the size of the deadweight loss? If you are a "benevolent" manager of a monopoly firm and are interested in reducing the deadweight loss of monopoly, should you maximize profits or maximize revenue? Explain your answer
A revenue maximizer operates where MR = 0 . This solution moves the monopolist closer to the socially optimal competitive outcome and reduces deadweight loss. Revenue maximization is potentially a more "socially" optimal objective for monopoly markets than profit maximization.
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Why is national defence provided by the government?
a) Free riders make it difficult for private markets to supply the socially optimal quantity. b) It is impossible for private markets to produce public goods. c) If the good were produced in private markets, most likely too much of the good would be produced. d) Products provided by the government can be produced more efficiently.
In the above table, what is marginal product of labor for the 2nd worker?
A) 20 B) 8 C) 10 D) 12