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

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