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When the average total cost is $30, the marginal revenue is $40, and the price is $50, a monopoly is in operation. In order to maximise revenues, this company should: If atc is at its minimum level and the atc curve is u-shaped reduced output.
A monopoly's demand curve often intersects the average cost at its lowest point and is on the right side of the marginal revenue curve. Similar to this, when the average cost curve is at its smallest, the marginal cost curve crosses the average cost curve. Reduced Output Period is a period during the Term when the Facility's generation ,The average cost should be more than the marginal revenue at the point where profits are maximized. Since the marginal revenue in the provided example exceeds the minimum average cost, output should be decreased in order to maximise profit. Since the price is higher, the monopoly will still make super normal profits.
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