Suppose That at an Output of 1, 000 Units, a Monopolist

question 64

Multiple Choice

Suppose that at an output of 1, 000 units, a monopolist has marginal cost of $40, marginal revenue of $30, average variable cost of $30, and average total cost of $50.In order to maximize profit or minimize loss in the short run, the firm should

• A)shut down
• B)continue to produce 1, 000 units
• C)produce fewer than 1, 000 units but still operate
• D)produce more than 1, 000 units
• E)increase its plant size to gain economies of scale

---

Definitions:

Timeliness

The characteristic of occurring at a suitable or opportune time, particularly relevant in the context of information delivery and project completion.

Future Cost

Costs that have not yet been incurred but are expected to be as a result of current decisions or plans.

Information

Data that has been processed, organized, or presented in a manner that makes it meaningful or useful to the person receiving it.

Accounting Data

Information related to financial transactions and status, used for analysis, planning, and decision-making in business.