In the short run,a monopoly should shut down whenever
A)marginal revenue exceeds marginal cost
B)price is less than average total cost
C)total revenue is less than total cost
D)price exceeds the ratio of marginal cost to average cost at the optimal output
E)price is less than average variable cost everywhere

Question

Quizplus · Accepted Answer

In the short run, a monopoly should shut down if the price is less than the average variable cost everywhere, as it cannot cover its variable costs and would minimize losses by ceasing production.

In the Short Run,a Monopoly Should Shut Down Whenever